This paper presents a framework to understand and measure the effects of political borders on economic growth and per capita income levels. In our model, political integration between two countries results in a positive country size effect and a negative effect through reduced openness vis-à-vis the rest of the world. Additional effects stem from possible changes in other growth determinants, besides country size and openness, when countries are merged. We estimate the growth effects that would have resulted from the hypothetical removal of national borders between pairs of adjacent countries under various scenarios. We identify country pairs where political integration would have been mutually beneficial. We find that full political integration would have slightly reduced an average country's growth rate, while most countries would benefit from a more limited form of merger, involving higher economic integration with their neighbours.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
5202.
Enrico Spolaore & Romain Wacziarg, 2002.
"Borders and Growth,"
NBER Working Papers
9223, National Bureau of Economic Research, Inc.
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Spolaore, Enrico & Wacziarg, Romain, 2002.
"Borders and Growth,"
Research Papers
1761, Stanford University, Graduate School of Business.
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Find related papers by JEL classification: F1 - International Economics - - Trade O5 - Economic Development, Technological Change, and Growth - - Economywide Country Studies
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Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)
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