Formation of Nations in a Welfare-State Minded World
We model the endogenous formation of nations in a world economy where nations apply redistributive policies. We show that people's preference for stronger redistributive policies may lead to greater inequality in the world's distribution of income as a result of rich individuals tending to form their own nations. By the same token, stable economic integration occurs only when redistributive policies are not too strong.
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|Date of creation:||01 Jan 2000|
|Date of revision:|
|Publication status:||Published in Journal of Public Economic Theory 2000, vol. 2, pp. 157-181|
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