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Conflict, Defense Spending, and the Number of Nations

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  • Spolaore, Enrico
  • Alesina, Alberto

Abstract

This paper provides a formal model of endogenous border formation and choice of defense spending in a world with international conflict. We examine both the case of democratic governments and of dictatorships. The model is consistent with three observations. First, breakup of countries should follow a reduction in the likelihood of international conflicts. Second, the number of regional conflicts between smaller countries may increase as a result of the breakup of larger countries. Third, the size of the peace dividend (the reduction in defense spending in a more peaceful world) is limited by the process of country breakup.

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File URL: http://dash.harvard.edu/bitstream/handle/1/4553016/alesina_conflictdefense.pdf
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Bibliographic Info

Paper provided by Harvard University Department of Economics in its series Scholarly Articles with number 4553016.

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Date of creation: 2006
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Publication status: Published in European Economic Review
Handle: RePEc:hrv:faseco:4553016

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  1. Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February.
  2. Alberto Alesina & Enrico Spolaore & Romain Wacziarg, 1997. "Economic Integration and Political Disintegration," NBER Working Papers 6163, National Bureau of Economic Research, Inc.
  3. Friedman, David, 1977. "A Theory of the Size and Shape of Nations," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 59-77, February.
  4. Grossman, Herschel I, 1991. "A General Equilibrium Model of Insurrections," American Economic Review, American Economic Association, vol. 81(4), pages 912-21, September.
  5. Sachs, Jeffrey & Sala-i-Martin, Xavier, 1992. "Fiscal Federalism and Optimum Currency Areas: Evidence for Europe from the United States," CEPR Discussion Papers 632, C.E.P.R. Discussion Papers.
  6. Alessandra Casella & Jonathan S. Feinstein, 1990. "Public Goods in Trade: On the Formation of Markets and Political Jurisdictions," NBER Working Papers 3554, National Bureau of Economic Research, Inc.
  7. Alesina, Alberto & Spolaore, Enrico, 1997. "On the Number and Size of Nations," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1027-56, November.
  8. Garfinkel, M.R., 1992. ""Domestic Politics and International Conflict"," Papers 90-92-30, California Irvine - School of Social Sciences.
  9. Gregory D. Hess & Athanasios Orphanides, 1999. "War and Democracy," CESifo Working Paper Series 201, CESifo Group Munich.
  10. Alberto Alesina & Reza Baqir & Caroline Hoxby, 2000. "Political Jurisdictions in Heterogeneous Communities," NBER Working Papers 7859, National Bureau of Economic Research, Inc.
  11. Sandler,Todd & Hartley,Keith, 1995. "The Economics of Defense," Cambridge Books, Cambridge University Press, number 9780521447287, Fall.
  12. Hoxby, Caroline & Alesina, Alberto Francesco & Baqir, Reza, 2004. "Political Jurisdictions in Heterogeneous Communities," Scholarly Articles 4553034, Harvard University Department of Economics.
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