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Economic Integration and Political Disintegration

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  • Enrico Spolaore
  • Alberto Alesina
  • Romain Wacziarg

Abstract

In a world of trade restrictions, large countries enjoy economic benefits, because political boundaries determine the size of the market. Under free trade and global markets even relatively small cultural, linguistic or ethnic groups can benefit from forming small, homogeneous political jurisdictions. This paper provides a formal model of the relationship between openness and the equilibrium number and size of countries, and successfully tests two implications of the model. Firstly, the economic benefits of country size are mediated by the degree of openness to trade. Secondly, the history of nation-state creations and secessions is influenced by the trade regime.

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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 90 (2000)
Issue (Month): 5 (December)
Pages: 1276-1296

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Handle: RePEc:aea:aecrev:v:90:y:2000:i:5:p:1276-1296

Note: DOI: 10.1257/aer.90.5.1276
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References

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  1. Barro, Robert J, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 106(2), pages 407-43, May.
  2. Bolton, Patrick & Roland, Gerard, 1997. "The Breakup of Nations: A Political Economy Analysis," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 112(4), pages 1057-90, November.
  3. Enrico Spolaore & Romain Wacziarg, 2002. "Borders and Growth," NBER Working Papers 9223, National Bureau of Economic Research, Inc.
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  10. Wacziarg, Romain & Spolaore, Enrico & Alesina, Alberto, 2000. "Economic Integration and Political Disintegration," Scholarly Articles 4553029, Harvard University Department of Economics.
  11. Alberto Alesina & Enrico Spolaore, 1995. "On the Number and Size of Nations," NBER Working Papers 5050, National Bureau of Economic Research, Inc.
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  13. Bolton, Patrick & Roland, Gerard & Spolaore, Enrico, 1996. "Economic theories of the break-up and integration of nations," European Economic Review, Elsevier, vol. 40(3-5), pages 697-705, April.
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  16. DREZE , Jacques H., 1993. "Regions of Europe : A Feasible Status, to be discussed," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 1993037, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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