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Nation Formation and Genetic Diversity

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  • Desmet, Klaus
  • Le Breton, Michel
  • Ortuño-Ortín, 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 C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5918.

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Date of creation: Nov 2006
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Handle: RePEc:cpr:ceprdp:5918

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

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  1. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2005. "Cultural Biases in Economic Exchange," 2005 Meeting Papers 234, Society for Economic Dynamics.
  2. GINSBURGH, Victor & ORTUNO-ORTIN, Ignatio & WEBER, Shlomo, . "Disenfranchisement in linguistically diverse societies: the case of the European Union," CORE Discussion Papers RP -1773, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. DESMET, Klaus & ORTUNO-ORTIN, Ignacio & WEBER, Shlomo, 2005. "Peripheral diversity and redistribution," CORE Discussion Papers 2005044, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  8. Le Breton, M. & Weber, S., 1995. "Stability of Coalition Structures and the Principle of Optimal Partitioning," G.R.E.Q.A.M. 95a06, Universite Aix-Marseille III.
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  16. Stefano G. Athanasoulis & Robert J. Shiller, 2001. "World Income Components: Measuring and Exploiting Risk-Sharing Opportunities," American Economic Review, American Economic Association, vol. 91(4), pages 1031-1054, September.
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  20. repec:rus:hseeco:71039 is not listed on IDEAS
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