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Borders and Growth


  • Spolaore, Enrico
  • Wacziarg, Romain


This paper presents a framework to understand and measure the effects of political borders on economic growth and per capita income levels. In our model, political integration between two countries results in a positive country size effect and a negative effect through reduced openness vis-à-vis the rest of the world. Additional effects stem from possible changes in other growth determinants, besides country size and openness, when countries are merged. We estimate the growth effects that would have resulted from the hypothetical removal of national borders between pairs of adjacent countries under various scenarios. We identify country pairs where political integration would have been mutually beneficial. We find that full political integration would have slightly reduced an average country's growth rate, while most countries would benefit from a more limited form of merger, involving higher economic integration with their neighbours.

Suggested Citation

  • Spolaore, Enrico & Wacziarg, Romain, 2005. "Borders and Growth," CEPR Discussion Papers 5202, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:5202

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    References listed on IDEAS

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    2. Alberto Alesina & Enrico Spolaore, 1997. "On the Number and Size of Nations," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1027-1056.
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    More about this item


    economic growth; economic integration; political unions;

    JEL classification:

    • F1 - International Economics - - Trade
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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