On the Number and Size of Nations

50 Pages Posted: 15 Jul 2000 Last revised: 4 Apr 2008

See all articles by Alberto F. Alesina

Alberto F. Alesina

Harvard University - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Enrico Spolaore

Tufts University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: March 1995

Abstract

This paper studies the equilibrium determination of the number of political jurisdictions in different political regimes, democratic or not, and in different economic environments, with more or less economic integration. We focus on the trade off between the benefits of large jurisdictions in terms of economies of scale and the costs of heterogeneity of large and diverse populations. Our model implies that: i) democratization leads to secessions; ii) without an appropriate redistributive scheme (which we characterize) in equilibrium one observes an inefficiently large number of countries; iii) the equilibrium number of countries is increasing in the amount of economic integration. We also study the welfare effects of economic integration and free trade when the number of countries is endogenous.

Suggested Citation

Alesina, Alberto F. and Spolaore, Enrico, On the Number and Size of Nations (March 1995). NBER Working Paper No. w5050, Available at SSRN: https://ssrn.com/abstract=225829

Alberto F. Alesina (Contact Author)

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
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617-495-8388 (Phone)
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Centre for Economic Policy Research (CEPR)

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United Kingdom

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

Enrico Spolaore

Tufts University - Department of Economics ( email )

Medford, MA 02155
United States

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