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The stability and breakup of nations: a quantitative analysis

  • Klaus Desmet
  • Michel Breton
  • Ignacio Ortuño-Ortín
  • Shlomo Weber

    ()

This paper presents a model of nations where agents vote on the optimal level of public spending. Larger nations benefit from increasing returns in the provision of public goods, but bear the costs of greater cultural heterogeneity. This tradeoff induces agents' preferences over different geographical configurations, thus determining the likelihood of secessions or unions. After calibrating the model to Europe, we identify the regions prone to secession and the countries most likely to merge. As a test of the theory, we show that the model can account for the breakup of Yugoslavia and the dynamics of its disintegration. We also provide empirical support for the use of genetic distances as a proxy for cultural heterogeneity.

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File URL: http://hdl.handle.net/10.1007/s10887-011-9068-z
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Article provided by Springer in its journal Journal of Economic Growth.

Volume (Year): 16 (2011)
Issue (Month): 3 (September)
Pages: 183-213

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Handle: RePEc:kap:jecgro:v:16:y:2011:i:3:p:183-213
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  3. Victor Ginsburgh & Ignacio Ortuño-Ortín & Shlomo Weber, 2005. "Disenfranchisement In Linguistically Diverse Societies: The Case Of The European Union," Journal of the European Economic Association, MIT Press, vol. 3(4), pages 946-965, 06.
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  10. Anna Bogomolnaia & Michel Breton & Alexei Savvateev & Shlomo Weber, 2007. "Stability under unanimous consent, free mobility and core," International Journal of Game Theory, Springer, vol. 35(2), pages 185-204, January.
  11. Oded Galor & Quamrul Ashraf, 2008. "Human Genetic Diversity and Comparative Economic Development," Working Papers 2008-3, Brown University, Department of Economics.
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  16. Alesina, Alberto & Wacziarg, Romain, 1998. "Openness, country size and government," Journal of Public Economics, Elsevier, vol. 69(3), pages 305-321, September.
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  20. Andrés Romeu & M. Dolores Collado & Ignacio Ortuño Ortín, 2006. "Vertical Transmission Of Consumption Behavior And The Distribution Of Surnames," Working Papers. Serie AD 2006-09, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
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  24. Oded Galor & Quamrul Ashraf, 2007. "Cultural Assimilation, Cultural Diffusion and the Origin of the Wealth of Nations," Working Papers 2007-3, Brown University, Department of Economics.
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