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Conflict, defense spending, and the number of nations

  • Alesina, Alberto
  • Spolaore, Enrico

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://www.sciencedirect.com/science/article/B6V64-4D983X7-1/2/eda8fddd7cadb3ce637787bd1bf2957b
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Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 50 (2006)
Issue (Month): 1 (January)
Pages: 91-120

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Handle: RePEc:eee:eecrev:v:50:y:2006:i:1:p:91-120
Contact details of provider: Web page: http://www.elsevier.com/locate/eer

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  1. 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.
  2. Gregory D. Hess & Athanasios Orphanides, 1999. "War and Democracy," CESifo Working Paper Series 201, CESifo Group Munich.
  3. Alberto Alesina & Enrico Spolaore, 1995. "On the Number and Size of Nations," NBER Working Papers 5050, National Bureau of Economic Research, Inc.
  4. Alesina, Alberto & Perotti, Roberto & Spolaore, Enrico, 1995. "Togetheror separately? Issues on the costs and benefits of political and fiscal unions," European Economic Review, Elsevier, vol. 39(3-4), pages 751-758, April.
  5. Alberto Alesina & Reza Baqir & Caroline Hoxby, 2000. "Political Jurisdictions in Heterogeneous Communities," NBER Working Papers 7859, National Bureau of Economic Research, Inc.
  6. Xavier Sala-i-Martin & Jeffrey Sachs, 1991. "Fiscal Federalism and Optimum Currency Areas: Evidence for Europe From the United States," NBER Working Papers 3855, National Bureau of Economic Research, Inc.
  7. Casella, Alessandra & Feinstein, Jonathan, 1991. "Public Goods in Trade: On the Formation of Markets and Political Jurisdictions," CEPR Discussion Papers 511, C.E.P.R. Discussion Papers.
  8. Alberto Alesina & Enrico Spolaore & Romain Wacziarg, 1997. "Economic Integration and Political Disintegration," NBER Working Papers 6163, National Bureau of Economic Research, Inc.
  9. repec:hrv:faseco:4553034 is not listed on IDEAS
  10. Garfinkel, Michelle R, 1994. "Domestic Politics and International Conflict," American Economic Review, American Economic Association, vol. 84(5), pages 1294-1309, December.
  11. Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February.
  12. Grossman, Herschel I, 1991. "A General Equilibrium Model of Insurrections," American Economic Review, American Economic Association, vol. 81(4), pages 912-21, September.
  13. repec:cup:cbooks:9780521447287 is not listed on IDEAS
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