Shaping the Size of Nations: A Test of the Determinants of Secessions
Vives Discussion Paper No. 54, 2016
54 Pages Posted: 2 Dec 2016
Date Written: June 6, 2016
Little is known about the empirical determinants of state formation and dissolution, despite a rich theoretical literature on the subject. This paper attempts to fill that gap by treating the dissolution of the Soviet Union as a historical experiment in state breakup. I exploit regional variation in separatist protests across the 184 provinces of the Union to measure a demand for secession. This allows for a test of economic theories predicting that the incentive to secede should be determined by the trade-off between the cost of public goods provision and preference heterogeneity. I find strong evidence for the existence of this trade-off in shaping demand for secession. Similarly, I find that economic theory is to some extent able to predict the extent to which regional elites are actually pursuing a separatist policy. However, I also show that the popular demand for secession had little causal effect on actual separatist policy once exogenous variation in the propensity to protest is taken into account.
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