The mechanisms of private governance are potentially limitless. They facilitate cooperation in close-knit groups and among relative strangers. They facilitate cooperation between billions of people across political boundaries and anywhere where the government legal system is not capable of or uninterested in facilitating exchange. Private governance is responsible for cooperation in simple informal markets as well as the most advanced markets: stock markets, insurance markets, futures markets, and electronic commerce. Private governance makes markets work. Private governance replaces threats of coercion with numerous noncoercive mechanisms that expand the scope of trade, and it should be seen as one of the most successful peace projects in the history of the world.
-Edward Stringham (Private Governance)
(H/T: Cafe Hayek)
