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The non-territorial governance concept resembles closely the political philosophy of panarchism—a specific form of governance (i.e. ‘-archy’) that encompasses all others (i.e. ‘pan-’). The central idea is that individuals should have maximum freedom to join and leave the jurisdiction of any government they choose, without having to change their current location. The classical foundations of panarchism were laid more than a century and a half ago, but underwent a long dormant period until something of a contemporary revival of panarchist political theory and philosophy in the late twentieth century and today (Tucker & de Bellis 2015): Panarchy (pan-archy: many chiefs; multi-government) is a system of competing, co-existing governments which conduct their operations within the same geographical territories without making any claims to those territories, and whose only powers derive from the consent of those they govern, i.e., those who voluntarily agree to submit to a particular government. These voluntary governments are constituted and operate on the basis of contractual personal law rather than the coercive territorial law of the Nation-State. (Taylor 1989)

This chapter proposes an extension of the Coase theorem to the problems of political conflict and jurisdictional change. Most political interpretations of the Coase theorem take as given a prevailing political-jurisdictional system and describe Coasean bargains within it; for instance, how post-vote trades improve efficiency or otherwise, given transaction costs and institutional rule-constraints (Parisi 1997; Klick & Parisi 2003; Luppi & Parisi 2012). But seldom do they take a wider lens to the problem; to how an encompassing political-jurisdictional system is itself an assignment of ‘property rights in franchise’ (Buchanan 1973; 1975b), and to how the transformation of this very system can be evaluated in light of the Coase theorem. Given this, should there likewise be such a thing as the ‘jurisdictional Coase theorem’? If political exploits serve to reallocate property rights within the boundaries of a state then perhaps we can trace the Coase-theoretic reallocative consequences of changes across jurisdictional boundaries too. Coase—channelling Stigler—claimed that his theorem’s ‘logic cannot be questioned, only its domain’ (1992: 717). It is my purpose to consider whether its domain extends to political and jurisdictional change. This chapter argues that changes in political jurisdictions (territorial or nonterritorial) as well as the policies enacted within them (productive or redistributive) operate to reallocate property rights. And moreover, these processes are focused on internalisation of externalities while being beset by transaction costs and are therefore episodes of Coasean exchange.