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Country size and the rule of law: Resuscitating Montesquieu

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  • Olsson, Ola
  • Hansson, Gustav

Abstract

In this paper, we demonstrate that there is a robust negative relationship between the size of country territory and a measure of the rule of law for a large cross-section of countries. We outline a framework featuring two main reasons for this regularity; firstly that institutional quality often has the character of a local public good that is imperfectly spread across space from the core of the country to the hinterland, and secondly that a large territory usually is accompanied by valuable rents and a lack of openness that both tend to distort property rights institutions. Our empirical analysis further shows some evidence that whether the capital is centrally or peripherally located within the country matters for the average level of rule of law.

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Bibliographic Info

Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 55 (2011)
Issue (Month): 5 (June)
Pages: 613-629

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Handle: RePEc:eee:eecrev:v:55:y:2011:i:5:p:613-629

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Keywords: Country size Rule of law Institutions Development Montesquieu;

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Citations

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Cited by:
  1. Patrice Pieretti & Jacques-François Thisse & Skerdilajda Zanaj, 2011. "Tax havens or safe havens," CREA Discussion Paper Series 11-10, Center for Research in Economic Analysis, University of Luxembourg.
  2. Nicholas Charron & José Fernández-Albertos & Victor Lapuente, 2012. "Small is Different Size, Political Representation and Governance," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1220, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  3. Dalgaard, Carl-Johan & Olsson, Ola, 2007. "Why Are Market Economies Politically Stable? A Theory of Capitalist Cohesion," Working Papers in Economics 280, University of Gothenburg, Department of Economics.
  4. Tuan-Hwee Sng & Chiaki Moriguchi, 2013. "Taxation and Public Goods Provision in China and Japan before 1850," Global COE Hi-Stat Discussion Paper Series gd12-284, Institute of Economic Research, Hitotsubashi University.
  5. Congdon Fors, Heather, 2007. "Island Status, Country Size and Institutional Quality in Former Colonies," Working Papers in Economics 257, University of Gothenburg, Department of Economics.
  6. Olsson, Ola, 2007. "On the Institutional Legacy of Mercantilist and Imperialist Colonialism," Working Papers in Economics 247, University of Gothenburg, Department of Economics.
  7. Ahlerup, Pelle & Hansson, Gustav, 2011. "Nationalism and government effectiveness," Journal of Comparative Economics, Elsevier, vol. 39(3), pages 431-451, September.
  8. Michalopoulos, Stelios & Papaioannou, Elias, 2010. "Divide and Rule or the Rule of the Divided? Evidence from Africa," CEPR Discussion Papers 8088, C.E.P.R. Discussion Papers.
  9. Hansson, Gustav & Olsson, Ola, 2006. "Country Size and the Rule of Law: Resuscitating Montesquieu," Working Papers in Economics 200, University of Gothenburg, Department of Economics.
  10. Congdon Fors, Heather, 2014. "Do island states have better institutions?," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 34-60.

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