Advanced Search
MyIDEAS: Login to save this paper or follow this series

Nations, conglomerates, and empires : the tradeoff between income and sovereignty

Contents:

Author Info

  • Milanovic, Branko

Abstract

One of the apparent inconsistencies in the breakup of multinational states is that, while the republics justified their decision by claiming they wanted increased sovereignty, the new states'strong desire to join the European Union shows their intention to dissipate this sovereignty. How can the two desires be reconciled? The author explains that full sovereignty is neither reachable nor desirable for most countries. Economic sovereignty is normally limited in key areas: exchange rate policy, trade policy, labor and banking regulations, and so on. There is a tradeoff curve between sovereignty and income. The author tests the following premises: a) larger countries (measured by GDP) are more sovereign; and b) countries with abundant natural resources or skilled workers as well as democratic countries tend to be more integrated. The author finds a statistically strong impact of per capita wealth and democracy on international integration. The effect of country size is weaker. The author discusses why different countries may wish to form conglomerates. He finds that the willingness to join conglomerates is greater for countries that are relatively poor and for democracies. The country size effect is U shaped. The key gain from independence for the relatively rich republics that were former members of the Communist conglomerates was not the economic sovereignty in itself but the ability to switch from a poor to a rich conglomerate.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/1996/10/01/000009265_3961214163736/Rendered/PDF/multi0page.pdf
Download Restriction: no

Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1675.

as in new window
Length:
Date of creation: 31 Oct 1996
Date of revision:
Handle: RePEc:wbk:wbrwps:1675

Contact details of provider:
Postal: 1818 H Street, N.W., Washington, DC 20433
Phone: (202) 477-1234
Email:
Web page: http://www.worldbank.org/
More information through EDIRC

Related research

Keywords: Environmental Economics&Policies; Economic Theory&Research; Payment Systems&Infrastructure; Fiscal&Monetary Policy; Labor Policies; Environmental Economics&Policies; National Governance; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Inequality; Economic Theory&Research;

Find related papers by JEL classification:

References

References listed on IDEAS
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.:
as in new window
  1. Orlowski, Lucjan T., 1992. "Direct transfers between the former Soviet Union central budget and the republics: Past evidence and current implications," Kiel Working Papers 543, Kiel Institute for the World Economy.
  2. Vaubel Roland, 1992. "The Political Economy Of Centralization And The European Community," Journal des Economistes et des Etudes Humaines, De Gruyter, De Gruyter, vol. 3(1), pages 38, March.
  3. Alesina, Alberto & Perotti, Roberto & Spolaore, Enrico, 1995. "Togetheror separately? Issues on the costs and benefits of political and fiscal unions," European Economic Review, Elsevier, Elsevier, vol. 39(3-4), pages 751-758, April.
  4. Tarr David G., 1994. "The Terms-of-Trade Effects of Moving to World Prices on Countries of the Former Soviet Union," Journal of Comparative Economics, Elsevier, vol. 18(1), pages 1-24, February.
  5. Persson, T. & Tabellini, G., 1993. "Is Inequality Harmful for Growth," Papers, Stockholm - International Economic Studies 537, Stockholm - International Economic Studies.
  6. Paul Krugman, 1991. "The move toward free trade zones," Economic Review, Federal Reserve Bank of Kansas City, issue Nov, pages 5-25.
  7. Bolton, Patrick & Roland, GĂ©rard, 1995. "The Break up of Nations: A Political Economy Analysis," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1225, C.E.P.R. Discussion Papers.
  8. Jack Hirshleifer, 1991. "The Paradox Of Power," Economics and Politics, Wiley Blackwell, Wiley Blackwell, vol. 3(3), pages 177-200, November.
  9. Alesina, Alberto & Spolaore, Enrico, 1997. "On the Number and Size of Nations," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 112(4), pages 1027-56, November.
  10. Perotti, Roberto, 1992. "Income Distribution, Politics, and Growth," American Economic Review, American Economic Association, American Economic Association, vol. 82(2), pages 311-16, May.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Joan Costa-i-Font, 2010. "Unveiling Vertical State Downscaling: Identity and/or the Economy?," Europe in Question Discussion Paper Series of the London School of Economics (LEQs), London School of Economics / European Institute 0, London School of Economics / European Institute.
  2. Joan Costa Font & Ramon Tremosa Balcells, 2006. "National Identity and the Preference for State Opting-Out in the Basque Country," Working Papers in Economics, Universitat de Barcelona. Espai de Recerca en Economia 151, Universitat de Barcelona. Espai de Recerca en Economia.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:1675. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.