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Political geography

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  • Federico Etro

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Abstract

I study a model of geopolitical organization endogenizing the size of nations, their public spending and their degree of openness. The optimal geography may not be a stable equilibrium and a bias toward too many countries tends to emerge. An exogenous increase in openness tends to reduce the size of countries but also to increase the size of their public sectors. When openness is endogenous there can be multiple equilibria, some with globalization backlash associated with large nations and small governments and others with smaller countries, bigger governments and high openness. However, stable equilibria may imply excessive globalization, too many countries and too much government spending. Copyright Springer Science + Business Media, Inc. 2006

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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 127 (2006)
Issue (Month): 3 (June)
Pages: 321-343

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Handle: RePEc:kap:pubcho:v:127:y:2006:i:3:p:321-343

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Web page: http://www.springerlink.com/link.asp?id=100332

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  1. Robert A.J. Dur & Hein J. Roelfsema, 2002. "Why does Centralisation fail to internalise Policy Externalities?," Tinbergen Institute Discussion Papers 02-056/3, Tinbergen Institute, revised 11 Nov 2003.
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  3. Alesina, Alberto F & Angeloni, Ignazio & Etro, Federico, 2003. "International Unions," CEPR Discussion Papers 3913, C.E.P.R. Discussion Papers.
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  7. Federico Etro, 2003. "Globalization and Political Geography," CESifo Working Paper Series 986, CESifo Group Munich.
  8. Federico Etro, 2006. "Strategic Export Promotion," Working Papers 101, University of Milano-Bicocca, Department of Economics, revised Oct 2006.
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  12. Matthias Wrede, 2004. "Small States, Large Unitary States and Federations," Public Choice, Springer, vol. 119(1_2), pages 219-240, 04.
  13. Stegarescu, Dan, 2004. "Economic Integration and Fiscal Decentralization: Evidence from OECD Countries," ZEW Discussion Papers 04-86, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  14. Rivera-Batiz, Luis A & Romer, Paul M, 1991. "Economic Integration and Endogenous Growth," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 531-55, May.
  15. Wacziarg, Romain & Spolaore, Enrico & Alesina, Alberto, 2000. "Economic Integration and Political Disintegration," Scholarly Articles 4553029, Harvard University Department of Economics.
  16. Anke S. Kessler & Christoph Luelfesmann & Gordon M. Myers, 2007. "Federations, Constitutions, and Political Bargaining," Discussion Papers dp07-19, Department of Economics, Simon Fraser University.
  17. Federico Etro, 2004. "The Political Economy of Fiscal and Monetary Unions," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 63(3-4), pages 289-328, December.
  18. Lockwood, Ben, 2005. "Fiscal Decentralization: A Political Economy Perspective," The Warwick Economics Research Paper Series (TWERPS) 721, University of Warwick, Department of Economics.
  19. K Staal, 2004. "Country size and public good provision," Econometric Society 2004 Australasian Meetings 156, Econometric Society.
  20. Michele Ruta, 2005. "Economic Theories of Political (Dis)integration," Journal of Economic Surveys, Wiley Blackwell, vol. 19(1), pages 1-21, 02.
  21. Federico Etro, 2006. "The Engine of Growth," Working Papers 100, University of Milano-Bicocca, Department of Economics, revised Oct 2006.
  22. Haimanko, Ori & Le Breton, Michel & Weber, Shlomo, 2005. "Transfers in a polarized country: bridging the gap between efficiency and stability," Journal of Public Economics, Elsevier, vol. 89(7), pages 1277-1303, July.
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Citations

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Cited by:
  1. Radax, Wolfgang, 2009. "The number and size of nations revisited: Endogenous border formation with non-uniform population distributions," MPRA Paper 15783, University Library of Munich, Germany.
  2. De Donder, Philippe & Le Breton, Michel & Peluso, Eugenio, 2009. "On the (Sequential) Majority Choice of Public Good Size and Location," CEPR Discussion Papers 7223, C.E.P.R. Discussion Papers.
  3. Ahmed Mahmud, 2011. "The creation of multi-ethnic nations with or without a core region," Public Choice, Springer, vol. 147(3), pages 359-376, June.
  4. De Donder, Philippe & Le Breton, Michel & Peluso, Eugenio, 2010. "Majority Voting in Multidimensional Policy Spaces: Kramer-Shepsle versus Stackelberg," CEPR Discussion Papers 7646, C.E.P.R. Discussion Papers.
  5. Libman, Alexander Mikhailovich, 2009. "Эндогенные Границы И Распределение Власти В Федерациях И Международных Сообществах
    [ENDOGENOUS BOUNDARIES AND DISTRIBUTION O
    ," MPRA Paper 16473, University Library of Munich, Germany.
  6. Congdon Fors, Heather, 2014. "Do island states have better institutions?," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 34-60.
  7. Dan Stegarescu, 2009. "The effects of economic and political integration on fiscal decentralization: evidence from OECD countries," Canadian Journal of Economics, Canadian Economics Association, vol. 42(2), pages 694-718, May.
  8. Etro, Federico, 2008. "Growth leaders," Journal of Macroeconomics, Elsevier, vol. 30(3), pages 1148-1172, September.
  9. Filippo Gregorini, 2007. "Political Geography and Income Inequalities," DISCE - Quaderni dell'Istituto di Teoria Economica e Metodi Quantitativi itemq0746, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  10. Wolf-Heimo GRIEBEN, 2004. "Globalization, Labor Market Rigidities and Multiple Equilibria," DEGIT Conference Papers c009_020, DEGIT, Dynamics, Economic Growth, and International Trade.

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