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The Economics of Political Borders

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  • Enrico Spolaore

Abstract

This paper presents concepts from economic analysis that shed light on the formation and breakup of sovereign states. First, we discuss the key trade-off between economies of scale in the provision of public goods and political costs from heterogeneity of preferences. Second, we present four economic perspectives on the formation of borders: efficient borders, borders as democratic outcomes, borders in a world of rent-seeking Leviathans, and borders as outcomes of conflict and wars. Finally, we provide an analytical illustration of the basic ideas within a simple framework.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2012/wp-cesifo-2012-06/cesifo1_wp3854.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3854.

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Date of creation: 2012
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Handle: RePEc:ces:ceswps:_3854

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Keywords: economies of scale; heterogeneity costs; conflict; size of nations;

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References

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  1. Enrico Spolaore & Romain Wacziarg, 2007. "The Diffusion of Development," Discussion Papers Series, Department of Economics, Tufts University 0704, Department of Economics, Tufts University.
  2. Garfinkel, Michelle R. & Skaperdas, Stergios, 2007. "Economics of Conflict: An Overview," Handbook of Defense Economics, Elsevier.
  3. Spolaore, Enrico & Wacziarg, Romain, 2011. "Long-Term Barriers to the International Diffusion of Innovations," CEPR Discussion Papers 8541, C.E.P.R. Discussion Papers.
  4. Leamer, Edward E., 2012. "The Craft of Economics: Lessons from the Heckscher-Ohlin Framework," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262016877, December.
  5. Enrico Spolaore & Romain Wacziarg, 2012. "War and Relatedness," Discussion Papers Series, Department of Economics, Tufts University 0769, Department of Economics, Tufts University.
  6. Robert P. Inman & Daniel L. Rubinfeld, 2005. "Federalism and the Democratic Transition: Lessons from South Africa," American Economic Review, American Economic Association, vol. 95(2), pages 39-43, May.
  7. Ellingsen, Tore, 1998. "Externalities vs internalities: a model of political integration," Journal of Public Economics, Elsevier, vol. 68(2), pages 251-268, May.
  8. repec:ags:afjare:141665 is not listed on IDEAS
  9. Enrico Spolaore & Romain Wacziarg, 2002. "Borders and Growth," NBER Working Papers 9223, National Bureau of Economic Research, Inc.
  10. Klaus Desmet & Michel Breton & Ignacio Ortuño-Ortín & Shlomo Weber, 2011. "The stability and breakup of nations: a quantitative analysis," Journal of Economic Growth, Springer, vol. 16(3), pages 183-213, September.
  11. Stelios Michalopoulos & Elias Papaioannou, 2011. "The Long-Run Effects of the Scramble for Africa," NBER Working Papers 17620, National Bureau of Economic Research, Inc.
  12. Garfinkel, Michelle R., 2004. "Global threats and the domestic struggle for power," European Journal of Political Economy, Elsevier, vol. 20(2), pages 495-508, June.
  13. Michelle R. Garfinkel, 2003. "Stable Alliance Formation in Distributional Conflict," Public Economics 0305001, EconWPA, revised 16 Jun 2003.
  14. Jack Hirshleifer, 1989. "Conflict and rent-seeking success functions: Ratio vs. difference models of relative success," Public Choice, Springer, vol. 63(2), pages 101-112, November.
  15. Johannes Münster, 2007. "Simultaneous inter- and intra-group conflicts," Economic Theory, Springer, vol. 32(2), pages 333-352, August.
  16. Friedman, David, 1977. "A Theory of the Size and Shape of Nations," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 59-77, February.
  17. Alesina, Alberto & Spolaore, Enrico & Wacziarg, Romain, 2005. "Trade, Growth and the Size of Countries," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 23, pages 1499-1542 Elsevier.
  18. Bordignon, Massimo & Brusco, Sandro, 2001. "Optimal secession rules," European Economic Review, Elsevier, vol. 45(10), pages 1811-1834, December.
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