On the Political Economy of Secessions

The European Union is increasingly being confronted with national secession movements that defy the so-called Prodi doctrine. According to this doctrine, a region's exit from a nation necessarily leads to its exit from the EU. The article shows that secessions per se cannot be rejected for economic policy and game theory reasons. This is particularly true if the optimal state size changes. For EU member states it emerges that large states are no more or less successful than smaller ones. Moreover, the authors call into question the maxim of the immutability of borders in Europe using historical examples.