Public Goods and the Dissolution of States

20 Pages Posted: 4 Jul 2017

See all articles by Christopher J. Ellis

Christopher J. Ellis

University of Oregon - Department of Economics

Silke Friedrich

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Date Written: July 2017

Abstract

We present a simple model of the dissolution of states. We combine elements of the literature on the break‐up and integration of states based on models in the fiscal federalism tradition, with elements of the literature that explains the determination of a state's political institutions as a means to credibly promise redistributions in the face of costly, perhaps violent, redistributive conflict. We are able to characterize when the equilibrium involves the dissolution of a country, and when it involves continued unity. We are also able to explore some aspects of the linkages between political institutions and the determination of national boundaries.

Keywords: dissolution of states, fiscal federalism, redistribution conflict

JEL Classification: D02, D77, H22

Suggested Citation

Ellis, Christopher J. and Friedrich, Silke, Public Goods and the Dissolution of States (July 2017). Bulletin of Economic Research, Vol. 69, Issue 3, pp. 240-259, 2017, Available at SSRN: https://ssrn.com/abstract=2996817 or http://dx.doi.org/10.1111/boer.12065

Christopher J. Ellis (Contact Author)

University of Oregon - Department of Economics ( email )

Eugene, OR 97403
United States

Silke Friedrich

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

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