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Nation Formation and Genetic Diversity

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

This paper presents a model of nation formation in which culturally heterogeneous 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 secession and unification. We provide empirical support for choosing genetic distances as a proxy of cultural heterogeneity. By using data on genetic distances, we examine the stability of the current map of Europe and identify the regions prone to secession and the countries that are more likely to merge. Our framework is further applied to estimate the welfare gains from European Union membership.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5918.

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Date of creation: Nov 2006
Date of revision:
Handle: RePEc:cpr:ceprdp:5918
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  1. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2007. "Cultural Biases in Economic Exchange?," Economics Working Papers ECO2007/42, European University Institute.
  2. Gans, Joshua S. & Smart, Michael, 1996. "Majority voting with single-crossing preferences," Journal of Public Economics, Elsevier, vol. 59(2), pages 219-237, February.
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  4. GINSBURGH, Victor & ORTUNO-ORTIN, Ignatio & WEBER, Shlomo, . "Disenfranchisement in linguistically diverse societies: the case of the European Union," CORE Discussion Papers RP 1773, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  10. Campbell, John Y., 1999. "Asset prices, consumption, and the business cycle," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 19, pages 1231-1303 Elsevier.
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  14. Giuliano, Paola & Spilimbergo, Antonio & Tonon, Giovanni, 2006. "Genetic, Cultural and Geographical Distances," IZA Discussion Papers 2229, Institute for the Study of Labor (IZA).
  15. Igal Milchtaich & Eyal Winter, 2000. "Stability and Segregation in Group Formation," Discussion Paper Series dp263, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
  16. 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).
  17. Bogomolnaia, Anna & Jackson, Matthew O., 2002. "The Stability of Hedonic Coalition Structures," Games and Economic Behavior, Elsevier, vol. 38(2), pages 201-230, February.
  18. DESMET, Klaus & ORTUNO-ORTIN, Ignacio & WEBER, Shlomo, 2005. "Peripheral diversity and redistribution," CORE Discussion Papers 2005044, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  19. Dreze, J H & Greenberg, J, 1980. "Hedonic Coalitions: Optimality and Stability," Econometrica, Econometric Society, vol. 48(4), pages 987-1003, May.
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