A classic argument in economic theory is that in a world of zero transaction costs the free bargaining among parties spontaneously leads to an efficient allocation of resources. Attempts have been made by many economists to apply such an argument to the field of politics. In contrast to market...

The paper starts with a theoretical reinterpretation of some classical topics in the public choice literature, where specific elements of contract theory and the theory of the firm are introduced. By putting into contact these completely different fields of economics, it defines a general...