A model is developed explaining many common historical sequences: inter alia, the rise and fall of empires, expansion or contraction in the geographic size of nations, wars of secession, non-contested secessions, and growth of supra-national unions. The basic unit of analysis is a transaction in international (or national) law that verifies and legitimizes transformations from one organizational entity to another. Decision-makers for national, or super-national entities as well as those at sub-levels are assumed to be welfare maximizers under cost constraints. Potential secessionists face dispute costs, and decision-makers for the higher-level entity incur persuasion costs. Both costs may include military expenses. These transaction costs are shown to play a crucial role in determining the optimal number of independent countries in the world.
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Paper provided by University of Connecticut, Department of Economics in its series Working papers with number
2007-35.
Length: 37 pages Date of creation: Sep 2007 Date of revision: Handle: RePEc:uct:uconnp:2007-35
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Find related papers by JEL classification: F5 - International Economics - - International Relations and International Political Economy K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law N40 - Economic History - - Government, War, Law, and Regulation - - - General, International, or Comparative P48 - Economic Systems - - Other Economic Systems - - - Other Economic Systems: Political Economy; Legal Institutions;
Property Rights
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