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Nation Formation and Genetic Diversity

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  • Desmet, Klaus
  • Le Breton, Michel
  • Ortuno-Ortin, Ignacio

Abstract

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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  • Desmet, Klaus & Le Breton, Michel & Ortuno-Ortin, Ignacio, 2006. "Nation Formation and Genetic Diversity," IDEI Working Papers 133, Institut d'Économie Industrielle (IDEI), Toulouse.
  • Handle: RePEc:ide:wpaper:6450
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    Cited by:

    1. Enrico Spolaore & Romain Wacziarg, 2016. "War and Relatedness," The Review of Economics and Statistics, MIT Press, vol. 98(5), pages 925-939, December.
    2. Quamrul Ashraf & Oded Galor, 2008. "Human Genetic Diversity and Comparative Economic Development," 2008 Meeting Papers 617, Society for Economic Dynamics.
    3. Maystre, Nicolas & Olivier, Jacques & Thoenig, Mathias & Verdier, Thierry, 2014. "Product-based cultural change: Is the village global?," Journal of International Economics, Elsevier, vol. 92(2), pages 212-230.
    4. Maria Cubel, 2010. "Fiscal equalization and political conflict," Working Papers 2010/9, Institut d'Economia de Barcelona (IEB).
    5. Jacob A. Jordaan & Bogdan Dima, 2020. "Post Materialism and Comparative Economic Development: Do Institutions Act as Transmission Channel?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 148(2), pages 441-472, April.
    6. Enrico Spolaore, 2009. "National Borders, Conflict and Peace," CESifo Working Paper Series 2860, CESifo.
    7. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2009. "Cultural Biases in Economic Exchange?," The Quarterly Journal of Economics, Oxford University Press, vol. 124(3), pages 1095-1131.
    8. Quamrul Ashraf & Oded Galor, 2013. "The 'Out of Africa' Hypothesis, Human Genetic Diversity, and Comparative Economic Development," American Economic Review, American Economic Association, vol. 103(1), pages 1-46, February.
    9. Dimitrov, Dinko & Lazarova, Emiliya, 2011. "Two-sided coalitional matchings," Mathematical Social Sciences, Elsevier, vol. 62(1), pages 46-54, July.
    10. Gokmen, Gunes, 2017. "Clash of civilizations and the impact of cultural differences on trade," Journal of Development Economics, Elsevier, vol. 127(C), pages 449-458.
    11. Maria Cubel, 2010. "Fiscal equalization and political conflict," Working Papers 2010/9, Institut d'Economia de Barcelona (IEB).
    12. Collado, M. Dolores & Ortuño Ortin, Ignacio & Romeu, Andrés, 2008. "Vertical Transmission of Consumption Behavior and the Distribution of Surnames," UMUFAE Economics Working Papers 2651, DIGITUM. Universidad de Murcia.
    13. Kyle L. Marquardt & Yoshiko M. Herrera, 2015. "Ethnicity as a Variable: An Assessment of Measures and Data Sets of Ethnicity and Related Identities," Social Science Quarterly, Southwestern Social Science Association, vol. 96(3), pages 689-716, September.
    14. Elisenda Paluzie, 2010. "The Costs and Benefits of Staying Together: The Catalan Case in Spain," Chapters, in: Núria Bosch & Marta Espasa & Albert Solé Ollé (ed.), The Political Economy of Inter-Regional Fiscal Flows, chapter 14, Edward Elgar Publishing.

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    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • H40 - Public Economics - - Publicly Provided Goods - - - General

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