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Nation formation and genetic diversity

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  • DESMET, Klaus
  • LE BRETON, Michel
  • ORTUNO-ORTIN, Ignacio
  • WEBER, Shlomo

Abstract

This paper presents a model of nation formation in which culturally heterogeneous agents vote on the optimal level of public spending. Larger nations benefit from increasing returns in the provision of public goods, but bear the costs of greater cultural heterogeneity. This tradeoff induces agents? preferences over different geographical configurations, thus determining the likelihood of secession and unification. We provide empirical support for choosing genetic distances as a proxy of cultural heterogeneity. By using data on genetic distances, we examine the stability of the current map of Europe and identify the regions prone to secession and the countries that are more likely to merge. Our framework is further applied to estimate the welfare gains from European Union membership.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2006095.

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Date of creation: 00 Oct 2006
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Handle: RePEc:cor:louvco:2006095

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Keywords: nation formation; genetic diversity; cultural heterogeneity; secession; unification; European Union;

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  1. Spolaore, Enrico & Wacziarg, Romain, 2002. "Borders and Growth," Research Papers 1761, Stanford University, Graduate School of Business.
  2. Alberto Alesina & William Easterly & Janina Matuszeski, 2006. "Artificial States," Harvard Institute of Economic Research Working Papers 2115, Harvard - Institute of Economic Research.
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  6. Desmet, Klaus & Ortuño-Ortín, Ignacio & Weber, Shlomo, 2005. "Peripheral Diversity and Redistribution," CEPR Discussion Papers 5112, C.E.P.R. Discussion Papers.
  7. Wacziarg, Romain & Spolaore, Enrico, 2006. "The Diffusion of Development," Research Papers 1898r1, Stanford University, Graduate School of Business.
  8. Bogomolnaia, Anna & Jackson, Matthew O., 2002. "The Stability of Hedonic Coalition Structures," Games and Economic Behavior, Elsevier, vol. 38(2), pages 201-230, February.
  9. Giuliano, Paola & Spilimbergo, Antonio & Tonon, Giovanni, 2006. "Genetic, Cultural and Geographical Distances," CEPR Discussion Papers 5807, C.E.P.R. Discussion Papers.
  10. Breton, M. le & Weber, S., 1992. "Stability of Coalition Structures and the Principle of Optimal Partitioning," Papers 93-6, York (Canada) - Department of Economics.
  11. Ginsburgh, Victor & Ortuño-Ortín, Ignacio & Weber, Shlomo, 2005. "Disenfranchisement in Linguistically Diverse Societies: The Case of the European Union," CEPR Discussion Papers 4875, C.E.P.R. Discussion Papers.
  12. Bolton, Patrick & Roland, Gerard, 1997. "The Breakup of Nations: A Political Economy Analysis," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1057-90, November.
  13. Tayfun Sönmez & Suryapratim Banerjee & Hideo Konishi, 2001. "Core in a simple coalition formation game," Social Choice and Welfare, Springer, vol. 18(1), pages 135-153.
  14. Campbell, John Y., 1999. "Asset prices, consumption, and the business cycle," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 19, pages 1231-1303 Elsevier.
  15. Collado, M. Dolores & Ortuño Ortin, Ignacio & Romeu, Andrés, 2008. "Vertical Transmission of Consumption Behavior and the Distribution of Surnames," UMUFAE Economics Working Papers 2651, DIGITUM. Universidad de Murcia.
  16. Alberto Alesina & Enrico Spolaore, 1995. "On the Number and Size of Nations," NBER Working Papers 5050, National Bureau of Economic Research, Inc.
  17. Milchtaich, Igal & Winter, Eyal, 2002. "Stability and Segregation in Group Formation," Games and Economic Behavior, Elsevier, vol. 38(2), pages 318-346, February.
  18. repec:rus:hseeco:71039 is not listed on IDEAS
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