The dominating facts about the planet’s jurisdictions are their higgledy-piggledy differences—differences in sizes and resources; differences in the ethnic, racial, and religious characteristics of their residents; differences in their social, cultural, and political histories; and differences in types of governing authorities.

The early years of the twenty-first century saw heightened problems resulting from the cross-border migration of people.

It is a basic characteristic of market capitalism that market extremes and decentralized decisions can lead to market failures. It is a basic characteristic of politics that governance extremes and rigidities can lead to governance failures. Virtually every jurisdiction therefore has some combination of decentralized markets and government

The unfettered capital flows help to hold a nation politically accountable.

For the individuals and groups affected, decentralized decisions can produce inferior outcomes. Cooperation among decisionmakers—actions taken collectively rather than independently without cooperation—can produce superior outcomes. That is because, again, the core of governance is to identify and sustain appropriate compromise decisions for

An externality is said to occur when an activity by one agent affects the well-being of other agents who are not decisionmaking participants in that activity.

The fundamental point for a nation as a whole is that capital flowing across its borders allows a nation’s residents to enjoy higher standards of living than would otherwise be possible—time paths of consumption that are higher, better adapted to national preferences, and not rigidly tied to the peculiarities of their geography.

Public goods have one or both of two distinctive properties: If a public good is provided, all who value it tend to benefit whether or not they contribute to the cost of providing it. And if a public good is provided to anyone, it can often be provided at little or no additional cost to others.

The existence of market failures and the propensity for free-riding behavior is not a compelling reason for concluding that a jurisdiction should dispense with markets and decentralized decisionmaking. Collective governance can itself be costly or misguided, resulting in a governance failure.