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Country Size and the Rule of Law: Resuscitating Montesquieu

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  • Gustav Hansson
  • Ola Olsson

Abstract

The political and economic impact of country size has been a frequently discussed issue in social science. In accordance with the general hypothesis of Montesquieu, this paper demonstrates that there is a robust negative relationship between the size of country territory and a measure of the rule of law for a large cross-section of countries. We propose that there are two main reasons for this regularity; firstly that institutional quality often has the character of a local public good that is imperfectly spread across space from the capital to the hinterland, and secondly that a large territory usually is accompanied by valuable rents that tend to distort property rights institutions. Our empirical analysis further shows that whether the capital is centrally or peripherally located within the country matters for the average level of rule of law.

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Bibliographic Info

Paper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c011_033.

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Length: 37 pages
Date of creation: Jun 2006
Date of revision:
Handle: RePEc:deg:conpap:c011_033

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Keywords: country size; rule of law; institutions; development; Montesquieu;

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Citations

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Cited by:
  1. Stelios Michalopoulos & Elias Papaioannou, 2010. "Divide and Rule or the Rule of the Divided? Evidence from Africa," Discussion Papers Series, Department of Economics, Tufts University 0756, Department of Economics, Tufts University.
  2. Olsson, Ola, 2007. "On the Institutional Legacy of Mercantilist and Imperialist Colonialism," Working Papers in Economics 247, University of Gothenburg, Department of Economics.
  3. Dalgaard, Carl-Johan & Olsson, Ola, 2007. "Why Are Market Economies Politically Stable? A Theory of Capitalist Cohesion," Working Papers in Economics 280, University of Gothenburg, Department of Economics.
  4. Olsson, Ola & Hansson, Gustav, 2011. "Country size and the rule of law: Resuscitating Montesquieu," European Economic Review, Elsevier, vol. 55(5), pages 613-629, June.
  5. Congdon Fors, Heather, 2014. "Do island states have better institutions?," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 34-60.
  6. Tuan-Hwee Sng & Chiaki Moriguchi, 2013. "Taxation and Public Goods Provision in China and Japan before 1850," Global COE Hi-Stat Discussion Paper Series gd12-284, Institute of Economic Research, Hitotsubashi University.
  7. Patrice Pieretti & Jacques-François Thisse & Skerdilajda Zanaj, 2011. "Tax havens or safe havens," CREA Discussion Paper Series 11-10, Center for Research in Economic Analysis, University of Luxembourg.
  8. Ahlerup, Pelle & Hansson, Gustav, 2011. "Nationalism and government effectiveness," Journal of Comparative Economics, Elsevier, vol. 39(3), pages 431-451, September.
  9. Nicholas Charron & José Fernández-Albertos & Victor Lapuente, 2012. "Small is Different Size, Political Representation and Governance," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1220, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  10. Congdon Fors, Heather, 2007. "Island Status, Country Size and Institutional Quality in Former Colonies," Working Papers in Economics 257, University of Gothenburg, Department of Economics.

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