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The political economy of regionalism

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  • Goyal, S.
  • Staal, K.

Abstract

We examine the incentives of regions in a country to unite or to separate. We find that smaller regions have greater incentives to unite, relative to larger regions. We show, however, that on the whole, majority voting on separation and union generates excessive incentives to separate. This leads us to examine the scope of alternative political insititutions and rules in overcoming the potential inefficciency. Our paper also provides a wide range of examples to illustrate the different instituions used in actual practice to resolve such problems.

Suggested Citation

  • Goyal, S. & Staal, K., 1999. "The political economy of regionalism," Econometric Institute Research Papers EI 9957-/A, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    • Handle: RePEc:ems:eureir:1633
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    References listed on IDEAS

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    Keywords

    referendum; secession; union; voting;
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