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Political geography

  • Federico Etro

    ()

I study a model of geopolitical organization endogenizing the size of nations, their public spending and their degree of openness. The optimal geography may not be a stable equilibrium and a bias toward too many countries tends to emerge. An exogenous increase in openness tends to reduce the size of countries but also to increase the size of their public sectors. When openness is endogenous there can be multiple equilibria, some with globalization backlash associated with large nations and small governments and others with smaller countries, bigger governments and high openness. However, stable equilibria may imply excessive globalization, too many countries and too much government spending. Copyright Springer Science + Business Media, Inc. 2006

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File URL: http://hdl.handle.net/10.1007/s11127-006-2746-2
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Article provided by Springer in its journal Public Choice.

Volume (Year): 127 (2006)
Issue (Month): 3 (June)
Pages: 321-343

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Handle: RePEc:kap:pubcho:v:127:y:2006:i:3:p:321-343
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=100332

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  1. Matthias Wrede, 2004. "Small States, Large Unitary States and Federations," Public Choice, Springer, vol. 119(1_2), pages 219-240, 04.
  2. Alberto Alesina & Ignazio Angeloni & Federico Etro, 2003. "International Unions," Harvard Institute of Economic Research Working Papers 2001, Harvard - Institute of Economic Research.
  3. 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.
  4. Federico Etro, 2003. "Globalization and Political Geography," CESifo Working Paper Series 986, CESifo Group Munich.
  5. Alberto Alesina & Enrico Spolaore & Romain Wacziarg, 1997. "Economic Integration and Political Disintegration," NBER Working Papers 6163, National Bureau of Economic Research, Inc.
  6. Rivera-Batiz, Luis A & Romer, Paul M, 1991. "Economic Integration and Endogenous Growth," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 531-55, May.
  7. Federico Etro, 2004. "The Political Economy of Fiscal and Monetary Unions," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 63(3-4), pages 289-328, December.
  8. Buchanan, James M & Faith, Roger L, 1987. "Secession and the Limits of Taxation: Toward a Theory of Internal Exit," American Economic Review, American Economic Association, vol. 77(5), pages 1023-31, December.
  9. Robert Dur & Hein Roelfsema, 2005. "Why does centralisation fail to internalise policy externalities?," Public Choice, Springer, vol. 122(3), pages 395-416, March.
  10. repec:dgr:uvatin:20040026 is not listed on IDEAS
  11. Oliver Lorz & Gerald Willmann, 2004. "On the Endogenous Allocation of Decision Powers in Federal Structures," Kiel Working Papers 1209, Kiel Institute for the World Economy.
  12. Federico Etro, 2006. "The Engine of Growth," Working Papers 100, University of Milano-Bicocca, Department of Economics, revised Oct 2006.
  13. Anke S. Kessler & Christoph Luelfesmann & Gordon M. Myers, 2007. "Federations, Constitutions, and Political Bargaining," Discussion Papers dp07-19, Department of Economics, Simon Fraser University.
  14. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  15. Lockwood, Ben, 2005. "Fiscal Decentralization: A Political Economy Perspective," The Warwick Economics Research Paper Series (TWERPS) 721, University of Warwick, Department of Economics.
  16. Alberto Alesina & Romain Wacziarg, 1997. "Openness, Country Size and the Government," NBER Working Papers 6024, National Bureau of Economic Research, Inc.
  17. Haimanko, Ori & Le Breton, Michel & Weber, Shlomo, 2005. "Transfers in a polarized country: bridging the gap between efficiency and stability," Journal of Public Economics, Elsevier, vol. 89(7), pages 1277-1303, July.
  18. Stegarescu, Dan, 2004. "Economic Integration and Fiscal Decentralization: Evidence from OECD Countries," ZEW Discussion Papers 04-86, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  19. Michele Ruta, 2005. "Economic Theories of Political (Dis)integration," Journal of Economic Surveys, Wiley Blackwell, vol. 19(1), pages 1-21, 02.
  20. K Staal, 2004. "Country size and public good provision," Econometric Society 2004 Australasian Meetings 156, Econometric Society.
  21. Shin-Hwan Chiang & Ahmed Mahmud, 2008. "Federations, coalitions, and risk diversification," Public Choice, Springer, vol. 137(1), pages 403-426, October.
  22. Federico Etro, 2006. "Strategic Export Promotion," Working Papers 101, University of Milano-Bicocca, Department of Economics, revised Oct 2006.
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