Ilia Murtazashvili’s book begins with a question familiar to scholars of the new institutional economics: “Where do private property institutions come from and why do they change?” (p. 1). The mechanisms of institutional emergence and change are hotly debated among institutions scholars, with explanations generally falling into one of two camps: one that emphasizes spontaneous emergence in response to shifting relative prices (the Douglass North camp) and one that emphasizes the role of formal political bargaining and state-sponsored property rights (the Jack Knight camp). In the tradition of another well-known institutions scholar, Elinor Ostrom, however, Murtazashvili provocatively proposes a third mechanism of emergence and change, one that emphasizes the role of voluntary cooperatives intentionally created and situated outside the realm of formal politics. In short, the author proposes that self-organized and self-governed clubs can also encourage institutional emergence and drive institutional change.

A part of the influential Cambridge University Press series on the Political Economy of Institutions and Decisions (other books in the series include seminal works by North, Knight, and Ostrom), The Political Economy of the American Frontier challenges conventional insights through careful theoretical and empirical development. The story is ultimately a narrative history of the American West, with occasional use of hard data on, for example, the prices paid at formal land auctions. The American West has featured prominently in other studies of institutional emergence and change. For example, Gary Libecap’s (1989) Contracting for Property Rights, another in the same Cambridge series, examined the distributive implications of property rights by exploring the early development of property rights in mining, timber, and oil resources in the largely ungoverned frontier. Indeed, the absence of formal government in the West is the key to Libecap’s argument that institutions can emerge as a product of distributive conflict among competing groups who expect government to eventually formalize their claims. By situating his study in the American West, Murtazashvili directly speaks to a long list of previous institutions studies and rightly points out the limitations of these early studies—particularly that the West had more formal governance than commonly assumed.

Rather than the product of spontaneous emergence within an ungoverned wilderness (leaving aside the obvious issue of Native American property rights long overlooked by economic and legal historians), or the product of a centralized system of top-down property imposition by a formal state, Murtazashvili argues, private property over agricultural land, timber, and mining emerged in the American West through self-organized “claim clubs.” These intermediary organizations—neither formal government nor autonomous bargainers—served to establish and enforce, often through violence, private property claims by early European-descended settlers. Initially, claim clubs emerged to act as mediators of disputes among competing settlers over private property, but over time these organizations expanded to resemble and, in some places, rival state power. Large claim clubs had judicial, legislative, and executive functions and, much like a formal state, compelled membership of residents in their territories through the threat of violence or physical expulsion. However, no matter how much a claim club resembled a formal government, it was always limited in its focus to establishing claims, mediating disputes, and in some cases to lobbying for formal recognition of preexisting claims.

Perhaps most importantly, claim clubs sought to manipulate the formal machinations of the state. Formally, federal land was auctioned off both to ensure efficient transfer of land and to ensure an early source of revenue for a weak federal government. Claim clubs were extremely effective at manipulating auctions, however, by fixing bids and intimidating rivals. Additionally, many claim clubs sought, and usually received, ex post recognition of squatters’ rights when the federal government tried to auction formal titles. Murtazashvili goes so far as to argue that the Homestead Acts of the late nineteenth century that gave free land to settlers who made a claim can be seen as a rational response by the federal government to the large-scale manipulation of land auctions by claim clubs. This manipulation of land distribution created a moral hazard wherein the payoffs from squatting on land became more lucrative than waiting for a formal land auction. Claim clubs would eventually disappear from the landscape, but only after a century of creating, protecting, and changing private property rights throughout the American West.

The book does not argue that all institutional emergence or change is the product of clubs; rather, it simply argues that this is a third method of emergence and change overlooked in the existing literature. Claim clubs first emerged to protect land claimed under informal first-possession norms, wherein the first to declare ownership over a resource was granted rights over that resource. Often first-possession norms were enforced locally through physical violence. The traditional explanation of first-possession norms is that these are indicative of the spontaneous emergence of institutions: Since no government created the rule and no one can point to a moment in which they were conscientiously designed, these norms are likely to be an emergent phenomenon. But even these informal norms, Murtazashvili argues, cannot be understood without the context of the developing American political economy in the East. In other words, the first-possession norms worked because the settlers encountering the frontier already had a shared mental understanding of private property that derived from the formal society they were leaving. As claim clubs developed to protect early settlers’ claims of first-possession against later arrivals, they acted as a third mechanism of institutional change, somewhere between spontaneous and state-created emergence.

One critique of the book’s central argument is that claim clubs exhibit features common to what would otherwise be called government and may therefore be governments themselves, even if they are not formal states; but even this critique is acknowledged by the author. Though the text can be repetitive at times, this is more the product of a meticulous scholar building a complex argument than it is a criticism of the text itself. Over the course of the book, Murtazashvili skillfully develops a theoretical framework in which to investigate the question and then provides detailed empirical evidence gleaned from primary and secondary historical sources to answer the question. Rarely is a sentence wasted, let alone a paragraph, as the author develops theoretical expectations and a narrative of empirical evidence. Readers simply looking for an unconventional take on the history of the American West will be as engaged with the book as those looking for a nuanced argument that fits squarely in the literature on the political economy of institutional development.