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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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
5918.
DESMET, Klaus & LE BRETON, Michel & ORTUNO-ORTIN, Ignacio & WEBER, Shlomo, 2006.
"Nation formation and genetic diversity,"
CORE Discussion Papers
2006095, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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Find related papers by JEL classification: D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General H40 - Public Economics - - Publicly Provided Goods - - - General H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
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Alberto Alesina & William Easterly & Janina Matuszeski, 2006.
"Artificial States,"
NBER Working Papers
12328, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
William Easterly & Alberto Alesina & Janina Matuszeski, 2006.
"Artificial States,"
Working Papers
100, Center for Global Development.
[Downloadable!]
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).
[Downloadable!]
Other versions:
Enrico Spolaore & Romain Wacziarg, 2002.
"Borders and Growth,"
NBER Working Papers
9223, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
Spolaore, Enrico & Wacziarg, Romain, 2002.
"Borders and Growth,"
Research Papers
1761, Stanford University, Graduate School of Business.
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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.)
Enrico Spolaore & Romain Wacziarg, 2009.
"War and Relatedness,"
NBER Working Papers
15095, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
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