On the Number and Size of Nations
Alberto F. Alesina
Harvard University - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)
Tufts University - Department of Economics
Quarterly Journal of Economics, Vol. 112, No. 4, November 1997
This paper studies the equilibrium determination of the number of countries in different political regimes, and in different economic environments, with more or less economic integration. We focus on the trade-off between the benefits of large jurisdictions and the costs of heterogeneity of large and diverse populations. Our model implies that (i) democratization leads to secessions; (ii) in equilibrium one generally observes an inefficiently large number of countries; (iii) the equilibrium number of countries is increasing in the amount of economic integration.
JEL Classification: H10, H11Accepted Paper Series
Date posted: May 11, 1998
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