IDEAS home Printed from https://ideas.repec.org/p/deg/conpap/c011_033.html

Country Size and the Rule of Law: Resuscitating Montesquieu

Author

Listed:
  • Gustav Hansson
  • Ola Olsson

Abstract

The political and economic impact of country size has been a frequently discussed issue in social science. In accordance with the general hypothesis of Montesquieu, this paper demonstrates that there is a robust negative relationship between the size of country territory and a measure of the rule of law for a large cross-section of countries. We propose that there are two main reasons for this regularity; firstly that institutional quality often has the character of a local public good that is imperfectly spread across space from the capital to the hinterland, and secondly that a large territory usually is accompanied by valuable rents that tend to distort property rights institutions. Our empirical analysis further shows that whether the capital is centrally or peripherally located within the country matters for the average level of rule of law.

Suggested Citation

  • Gustav Hansson & Ola Olsson, 2006. "Country Size and the Rule of Law: Resuscitating Montesquieu," DEGIT Conference Papers c011_033, DEGIT, Dynamics, Economic Growth, and International Trade.
    • Handle: RePEc:deg:conpap:c011_033
    as

    Download full text from publisher

    File URL: http://degit.sam.sdu.dk/papers/degit_11/C011_033.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 15(1), pages 222-279, April.
    2. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64(5), pages 416-416.
    3. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 83-116.
    4. Mr. Carlos A Leite & Jens Weidmann, 1999. "Does Mother Nature Corrupt? Natural Resources, Corruption, and Economic Growth," IMF Working Papers 1999/085, International Monetary Fund.
    5. Alberto Alesina & Enrico Spolaore, 1997. "On the Number and Size of Nations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1027-1056.
    6. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," Journal of Economic Growth, Springer, vol. 9(3), pages 271-303, September.
    7. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    8. Ola Olsson & Heather Congdon Fors, 2004. "Congo: The Prize of Predation," Journal of Peace Research, Peace Research Institute Oslo, vol. 41(3), pages 321-336, May.
    9. Francisco Alcalá & Antonio Ciccone, 2003. "Trade and Productivity," Working Papers 12, Barcelona School of Economics.
    10. Olsson, Ola & Hibbs, Douglas Jr., 2005. "Biogeography and long-run economic development," European Economic Review, Elsevier, vol. 49(4), pages 909-938, May.
    11. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    12. Grier, Robin M, 1999. "Colonial Legacies and Economic Growth," Public Choice, Springer, vol. 98(3-4), pages 317-335, March.
    13. William Easterly & Ross Levine, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1203-1250.
    14. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    15. Congdon Fors, Heather & Olsson, Ola, 2007. "Endogenous institutional change after independence," European Economic Review, Elsevier, vol. 51(8), pages 1896-1921, November.
    16. Alberto Alesina & William Easterly & Janina Matuszeski, 2011. "Artificial States," Journal of the European Economic Association, European Economic Association, vol. 9(2), pages 246-277, April.
    17. Olsson, Ola & Hansson, Gustav, 2011. "Country size and the rule of law: Resuscitating Montesquieu," European Economic Review, Elsevier, vol. 55(5), pages 613-629, June.
    18. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 759-784, August.
    19. Ola Olsson, 2006. "Diamonds Are a Rebel's Best Friend," The World Economy, Wiley Blackwell, vol. 29(8), pages 1133-1150, August.
    20. Paul Krugman, 1998. "Space: The Final Frontier," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 161-174, Spring.
    21. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
    22. Gerring, John & Thacker, Strom C. & Moreno, Carola, 2005. "Centripetal Democratic Governance: A Theory and Global Inquiry," American Political Science Review, Cambridge University Press, vol. 99(4), pages 567-581, November.
    23. Xavier Sala-i-Martin & Arvind Subramanian, 2013. "Addressing the Natural Resource Curse: An Illustration from Nigeria," Journal of African Economies, Centre for the Study of African Economies, vol. 22(4), pages 570-615, August.
    24. Thierry Mayer & Keith Head, 2002. "Illusory Border Effects: Distance Mismeasurement Inflates Estimates of Home Bias in Trade," Working Papers 2002-01, CEPII research center.
    25. Arzaghi, Mohammad & Henderson, J. Vernon, 2005. "Why countries are fiscally decentralizing," Journal of Public Economics, Elsevier, vol. 89(7), pages 1157-1189, July.
    26. Donald Wittman, 2000. "The Wealth and Size of Nations," Journal of Conflict Resolution, Peace Science Society (International), vol. 44(6), pages 868-884, December.
    27. 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.
    28. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    29. Carl-Johan Dalgaard & Ola Olsson, 0. "Windfall Gains, Political Economy and Economic Development," Journal of African Economies, Centre for the Study of African Economies, vol. 17(suppl_1), pages -109.
    30. Gregory N. Price, 2003. "Economic Growth in a Cross‐section of Nonindustrial Countries: Does Colonial Heritage Matter for Africa?," Review of Development Economics, Wiley Blackwell, vol. 7(3), pages 478-495, August.
    31. Wolfgang Keller, 2004. "International Technology Diffusion," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 752-782, September.
    32. Michael Kremer, 1993. "Population Growth and Technological Change: One Million B.C. to 1990," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 681-716.
    33. Stephen Knack & Omar Azfar, 2003. "Trade intensity, country size and corruption," Economics of Governance, Springer, vol. 4(1), pages 1-18, April.
    34. Alesina, Alberto & Devleeschauwer, Arnaud & Easterly, William & Kurlat, Sergio & Wacziarg, Romain, 2003. "Fractionalization," Journal of Economic Growth, Springer, vol. 8(2), pages 155-194, June.
    35. Rose, Andrew K., 2006. "Size really doesn't matter: In search of a national scale effect," Journal of the Japanese and International Economies, Elsevier, vol. 20(4), pages 482-507, December.
    36. Olsson, Ola, 2009. "On the democratic legacy of colonialism," Journal of Comparative Economics, Elsevier, vol. 37(4), pages 534-551, December.
    37. Alesina, Alberto & Wacziarg, Romain, 1998. "Openness, country size and government," Journal of Public Economics, Elsevier, vol. 69(3), pages 305-321, September.
    38. World Bank, 2004. "World Development Indicators 2004," World Bank Publications - Books, The World Bank Group, number 13890, April.
    39. Fearon, James D, 2003. "Ethnic and Cultural Diversity by Country," Journal of Economic Growth, Springer, vol. 8(2), pages 195-222, June.
    40. Una Okonkwo Osili & Anna L. Paulson, 2004. "Institutional quality and financial market development: evidence from international migrants in the U.S," Working Paper Series WP-04-19, Federal Reserve Bank of Chicago.
    41. Wolfgang Keller, 2002. "Geographic Localization of International Technology Diffusion," American Economic Review, American Economic Association, vol. 92(1), pages 120-142, March.
    42. Jeffrey D. Sachs, 2001. "Tropical Underdevelopment," NBER Working Papers 8119, National Bureau of Economic Research, Inc.
    43. Daron Acemoglu & Simon Johnson & James A. Robinson, 2002. "Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1231-1294.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Congdon Fors, Heather, 2014. "Do island states have better institutions?," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 34-60.
    2. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    3. Congdon Fors, Heather & Olsson, Ola, 2007. "Endogenous institutional change after independence," European Economic Review, Elsevier, vol. 51(8), pages 1896-1921, November.
    4. Glawe, Linda & Wagner, Helmut, 2017. "The Deep Determinants of the Middle-Income Trap," CEAMeS Discussion Paper Series 10/2017, University of Hagen, Center for East Asia Macro-economic Studies (CEAMeS), revised 2017.
    5. Fabrizio Carmignani & Abdur Chowdhury, 2012. "The Geographical Dimension of the Development Effects of Natural Resources," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 52(4), pages 479-498, August.
    6. Congdon Fors, Heather, 2007. "Island Status, Country Size and Institutional Quality in Former Colonies," Working Papers in Economics 257, University of Gothenburg, Department of Economics.
    7. Enrico Spolaore & Romain Wacziarg, 2009. "The Diffusion of Development," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(2), pages 469-529.
    8. Fenske, James, 2010. "Institutions in African history and development: A review essay," MPRA Paper 23120, University Library of Munich, Germany.
    9. Abdoul’ Mijiyawa, 2013. "Determinants of property rights institutions: survey of literature and new evidence," Economics of Governance, Springer, vol. 14(2), pages 127-183, May.
    10. Quamrul Ashraf & Oded Galor, 2008. "Human Genetic Diversity and Comparative Economic Development," 2008 Meeting Papers 617, Society for Economic Dynamics.
    11. Ruba Aljarallah, 2021. "An Analysis of the Impact of Rents from Non-renewable Natural Resources and Changes in Human Capital on Institutional Quality: A Case Study of Kuwait," International Journal of Energy Economics and Policy, Econjournals, vol. 11(5), pages 224-234.
    12. Vatcharin Sirimaneetham, 2006. "What drives liberal policies in developing countries?," Bristol Economics Discussion Papers 06/587, School of Economics, University of Bristol, UK.
    13. Costantini, Valeria & Liberati, Paolo, 2014. "Technology transfer, institutions and development," Technological Forecasting and Social Change, Elsevier, vol. 88(C), pages 26-48.
    14. Carmignani, Fabrizio & Chowdhury, Abdur, 2011. "The Development Effects of Natural Resources: A Geographical Dimension," Working Papers and Research 2011-09, Marquette University, Center for Global and Economic Studies and Department of Economics.
    15. Bennett, Daniel L. & Faria, Hugo J. & Gwartney, James D. & Morales, Daniel R., 2017. "Economic Institutions and Comparative Economic Development: A Post-Colonial Perspective," World Development, Elsevier, vol. 96(C), pages 503-519.
    16. Kezia De Lucas Bondezan & Joilson Dias, 2014. "Crescimento Econômico De Longo Prazo No Brasil: Uma Abordagem Sobre O Da Acumulação De Capital E Das Instituições," Anais do XLI Encontro Nacional de Economia [Proceedings of the 41st Brazilian Economics Meeting] 096, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    17. Olsson, Ola, 2007. "On the Institutional Legacy of Mercantilist and Imperialist Colonialism," Working Papers in Economics 247, University of Gothenburg, Department of Economics.
    18. Fabrizio Carmignani, 2015. "The Curse of Being Landlocked: Institutions Rather than Trade," The World Economy, Wiley Blackwell, vol. 38(10), pages 1594-1617, October.
    19. Williamson, Claudia R., 2012. "Dignity and development," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(6), pages 763-771.
    20. Ann-Sofie Isaksson, 2011. "Social divisions and institutions: assessing institutional parameter variation," Public Choice, Springer, vol. 147(3), pages 331-357, June.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative
    • N50 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - General, International, or Comparative
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:deg:conpap:c011_033. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jan Pedersen (email available below). General contact details of provider: https://edirc.repec.org/data/iehhsdk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.