There is a possible alternative explanation for group cooperation that does completely away with the problem of enforcement: the idea that cooperative behaviour could be innate to individuals within groups and be the result of evolutionary selection (see Bergstrom, 2002,
for a survey).64 The arguments that are presented in the literature combine the idea of
evolutionary group selection (whereby more cooperative groups reproduce more successfully as groups) with the idea of individual selection within groups (whereby defectors reproduce more within groups) and show that the tension between these two can result in equilibria where cooperative behaviour prevails (defectors do invade groups but those groups end- up self-destructing, so that eventually only cooperators remain). Similarly, evolutionary arguments have been offered to rationalize individuals’ willingness to punish defectors even when punishing is not individually rational.
One key argument against the idea that cooperation can be sustained because of hard- wired, evolutionarily selected behaviour is that there are independent reasons for selfish behaviour to be evolutionarily selected in an environment where the problem of sustaining collective consumption within groups is not theonlyproblem individuals face. According to Robson and Kaplan (2003), individual optimizing behaviour coupled with learning enables individuals to cope better with a changing environment and/or to adopt a hunter/gatherer survival strategy (whereby learnt knowledge about one’s environment becomes essential). Moreover, we cannot expect individual rationality with respect to output production and other individual choices to be simply decoupled from individual rationality in collective consumption choices, as it may be impossible for a rational nonopportunist to survive in a world of rational opportunists. Consider, for example, the following variant of the evolutionary models mentioned above. Suppose that individuals interact with each other within groups both according to situations that consist of either positive-sum games (giving rise to a collective choice problem) or zero-sum games (where competition is “private” in nature), and suppose that the positive-sum or zero-sum nature of the situation is not immediately obvious to individuals. Then, individuals who selectively behave cooperatively in positive-sum situations may be vulnerable to misrepresentation by other individuals, and may therefore fare comparatively worse than purely opportunistic individuals.
Another problem of interpretation arises if we try to apply ideas from the literature on the evolution of cooperation to explain tax constitutions. Much of the literature on evolu- tion and cooperation, although rather abstract and necessarily vague in its discussion of how
its constructs map into real-world institutions, refers to some sort of meta-game whereby people choose to behave cooperatively or noncooperatively in positive-sum situations. But there is no obvious reason why Nature should restrict itself to evolving cooperation with respect to collective consumption problems; it could also evolve suitable hard-wired be- haviour in all sort of economic contexts where selfish behaviour may generate collectively undesirable consequences. So, for example, Nature should also take care of selecting peo- ple’s behaviour in such a way that they do not respond at all to the presence of taxes in their budget constraints and no not take advantage of any tax avoidance opportunities, or so that, as producers, they price at marginal cost independently of profit maximization considerations (e.g. even if they happen to be monopolists). Thus, if we are prepared to abandon the idea that individuals behave in a selfish, individually rational way in the case of collective consumption, we should be prepared to do so with respect to all possible forms of group interaction.
An even more compelling argument against the idea of evolutionarily selected coop- erative behaviour is that, as Robson (2001) notes, opportunistic individuals are able in any event to solve coordination failures through repeated interaction, so long as lifespans are sufficiently long. Then, the group selection advantage of hard-wired cooperators vis-`a- vis opportunists would vanish, and the only thing that would remain is the comparative vulnerability of hard-wired cooperators to misrepresentations by opportunist invaders: in- dividually rational, selfish behaviour will thus be selected over hard-wired cooperation.
On the other hand, the idea of self-enforcing tax constitutions that we put forward here is not inconsistent with the idea of evolutionary selection, as long as this takes place in parallel with repeated interaction amongst long-lived individually rational agents. There are, however, ways in which evolution and repeated interaction may interface. For ex- ample, in an overlapping generations setup, initial beliefs of newborns about their own characteristics may be systematically biased relative to population characteristics in a way that facilitates the support of cooperation without contradicting rationality and learning.65
And, as noted earlier, under incomplete information efficient outcomes may need to be
supported by a specific set of rational, self-sustaining beliefs that may be the result of evo- lutionary selection–which is not inconsistent with Hayek’s (1967) idea that social norms
are a product of cultural evolution. Furthermore, as long as fitness and utility do not
diverge too much (as they should not in the long run), veil-of-ignorance selection is not inconsistent with fitness maximization, although there are difficulties in the application of expected utility theory to characterize ex-ante selection.66 Finally, evolutionary ideas could be applied to group rather than individual selection as an alternative to ex-ante util- ity maximization in order to rationalize equilibrium selection of efficient outcomes under repeated interaction (Boyd and Richerson, 1994).