On the Number and Size of Nations
Quarterly Journal of Economics, Vol. 112, No. 4, November 1997
Posted: 11 May 1998
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, H11
Suggested Citation: Suggested Citation