Abstract. Political theories of property rights are less optimistic than self-governance perspectives regarding the ability of non-state organizations to supply private property institutions. Despite offering different answers to the question of where property rights come from, these diverse perspectives share a concern with organizational capacity, constraints, and legitimacy as explanations why organizations are able to supply private property rights. We use these shared concerns as a point of departure to investigate formal and informal private property rights in rural Afghanistan. We find that informal private property rights are more effective than formal private property rights because customary organizations fare better than the state on the dimensions of capacity, constraints, and legitimacy. More generally, these 'political' features of formal and informal organizations explain why self-governance works, as well as provide insight into the challenges confronting efforts in fragile states to establish formal private property institutions. IntroductionOne of the fundamental questions of institutional economics is where private property rights come from. A long tradition of the literature in both the 'old' and 'new' institutional economics views the state as the main source of private property rights. Commons (1924), in one of the early works that came to define the old institutional economics, located the origins of private property rights in legal decisions of judges. Along similar lines, Bromley (2006) suggests that the concept of a private property 'right' only makes sense when individuals can call on a state to enforce it. There is also a sizable new institutional economics literature that conceptualizes of the state as the fundamental source of private property rights (North and Weingast, 1989;Olson, 1993;Riker and Sened, 1991;Riker and Weimer, 1993). These political theories of property rights expect that informal private property rights will be inferior to state-backed private property rights (Hodgson, 2009). 1 *

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Institutional economists have analyzed permissionless blockchains as a novel institutional building block for voluntary economic exchange and distributed governance, with their unique protocol features such as automated contract execution, high levels of network and process transparency, and uniquely distributed governance. But such institutional analysis needs to be complemented by polycentric analysis of how blockchains change. We characterize such change as resulting from internal sources and external sources. Internal sources include constitutional (protocol) design and collective-choice processes for updating protocols, which help coordinate network participants and users. External sources include competitive pressure from other cryptocurrency networks. By studying two leading networks, Bitcoin and Ethereum, we illustrate how conceptualizing blockchains as competing and constitutional polycentric enterprises clarifies their processes of change.