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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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References

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Citations

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Cited by:
  1. 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.
  2. 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.
  3. Hansson, Gustav & Olsson, Ola, 2006. "Country Size and the Rule of Law: Resuscitating Montesquieu," Working Papers in Economics 200, University of Gothenburg, Department of Economics.
  4. Pieretti, Patrice & Thisse, Jacques-François & Zanaj, Skerdilajda, 2011. "Tax havens or safe havens," CEPR Discussion Papers 8570, C.E.P.R. Discussion Papers.
  5. 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.
  6. Dalgaard, C. & Olsson, O., 2007. "Why Are Market Economies Politically Stable? A Theory of Capitalist Cohesion," Cambridge Working Papers in Economics 0765, Faculty of Economics, University of Cambridge.
  7. Ahlerup, Pelle & Hansson, Gustav, 2008. "Nationalism and Government Effectiveness," Working Papers in Economics 313, University of Gothenburg, Department of Economics.
  8. Congdon Fors, Heather, 2014. "Do island states have better institutions?," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 34-60.
  9. Olsson, Ola, 2007. "On the Institutional Legacy of Mercantilist and Imperialist Colonialism," Working Papers in Economics 247, University of Gothenburg, Department of Economics.
  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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