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 stronger distributive 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.
|Date of creation:||1995|
|Date of revision:||Aug 1999|
|Publication status:||Published in Journal of Public Economic Theory 2:157-181 (2000)|
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