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Nation Formation and Genetic Diversity

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Author Info
Desmet, Klaus
Le Breton, Michel
Ortuño-Ortín, Ignacio
Weber, Shlomo

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

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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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References listed on IDEAS
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  1. 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.
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  2. Alberto Alesina & William Easterly & Janina Matuszeski, 2006. "Artificial States," NBER Working Papers 12328, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  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). [Downloadable!]
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  4. Suryapratim Banerjee & Hideo Konishi & Tayfun Sonmez, 1999. "Core in a Simple Coalition Formation Game," Boston College Working Papers in Economics 449, Boston College Department of Economics. [Downloadable!]
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  5. 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. [Downloadable!] (restricted)
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  6. Enrico Spolaore & Romain Wacziarg, 2006. "The Diffusion of Development," NBER Working Papers 12153, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. 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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  8. Enrico Spolaore & Romain Wacziarg, 2002. "Borders and Growth," NBER Working Papers 9223, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  9. Friend, Irwin & Blume, Marshall E, 1975. "The Demand for Risky Assets," American Economic Review, American Economic Association, vol. 65(5), pages 900-922, December. [Downloadable!] (restricted)
  10. Gans, Joshua S. & Smart, Michael, 1996. "Majority voting with single-crossing preferences," Journal of Public Economics, Elsevier, vol. 59(2), pages 219-237, February. [Downloadable!] (restricted)
  11. Andrés Romeu & M. Dolores Collado & Ignacio Ortuño Ortín, 2006. "Vertical Transmission Of Consumption Behavior And The Distribution Of Surnames," Working Papers. Serie AD 2006-09, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
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  12. GINSBURGH, Victor & ORTUNO-ORTIN, Ignacio & WEBER, Shlomo, 2005. "Disenfranchisement in linguistically diverse societies. The case of the European Union," CORE Discussion Papers 2004080, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
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  13. Alberto Alesina & Enrico Spolaore, 1995. "On the Number and Size of Nations," NBER Working Papers 5050, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  14. Paola Giuliano & Antonio Spilimbergo & Giovanni Tonon, 2006. "Genetic, Cultural and Geographical Distances," IZA Discussion Papers 2229, Institute for the Study of Labor (IZA). [Downloadable!]
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  15. Milchtaich, Igal & Winter, Eyal, 2002. "Stability and Segregation in Group Formation," Games and Economic Behavior, Elsevier, vol. 38(2), pages 318-346, February. [Downloadable!] (restricted)
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  16. Guiso, Luigi & Sapienza, Paola & Zingales, Luigi, 2005. "Cultural Biases in Economic Exchange," CEPR Discussion Papers 4837, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  17. repec:rus:hseeco:71039 is not listed on IDEAS
  18. Bogomolnaia, Anna & Jackson, Matthew O., 2002. "The Stability of Hedonic Coalition Structures," Games and Economic Behavior, Elsevier, vol. 38(2), pages 201-230, February. [Downloadable!] (restricted)
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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.)

  1. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2007. "Cultural Biases in Economic Exchange?," Economics Working Papers ECO2007/42, European University Institute. [Downloadable!]
    Other versions:
  2. Ashraf, Quamrul & Galor, Oded, 2008. "Human Genetic Diversity and Comparative Economic Development," CEPR Discussion Papers 6824, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  3. Enrico Spolaore & Romain Wacziarg, 2009. "War and Relatedness," Discussion Papers Series, Department of Economics, Tufts University 0734, Department of Economics, Tufts University. [Downloadable!]
    Other versions:
  4. Victor Ginsburgh, 2005. "Languages, Genes, and Cultures," Journal of Cultural Economics, Springer, vol. 29(1), pages 1-17, February. [Downloadable!] (restricted)
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