A Market for Sovereign Control

Abstract

Can popular sovereignty and sovereign territory co-exist? Can we imagine a world in which sovereignty territory could, like property, be traded among countries while still respecting people’s interest in self-determination? What if countries’ right to territorial integrity were predicated on a corresponding duty to govern well? And can the international system provide mechanisms and incentives to improve the status quo?

These are not simply academic questions. Across the world, many regions are located in the wrong nations — wrong in the sense that the people of these regions believe they would be safer, happier, and wealthier if surrounded by different borders and governed by different leaders. These people might be able to improve their lot by voting out their current government or by emigrating, but those are imperfect solutions and are often unavailable to those who need them most. We ask how international law could help ameliorate the bad government problem by facilitating welfare-enhancing border changes.

Keywords: international law, secession, market for control, sovereign debt

JEL Classification: F30, H81, K11, K33