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Stability of Nations and Genetic Diversity

  • Klaus Desmet

    ()

    (Universidad Carlos III, Getafe (Madrid), Spain, and CEPR)

  • Michel Le Breton

    (Universite de Toulouse I, GREMAQ and IDEI, Toulouse, France)

  • Ignacio Ortuno-Ortin

    ()

    (Universidad Carlos III, Getafe (Madrid), Spain)

  • Shlomo Weber

    ()

    (Southern Methodist University, Dallas, USA, CORE, Catholic University of Louvain, Louvain-la-Neuve, Belgium, and CEPR)

This paper presents a model of nations where 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 or unification. We provide empirical support for choosing genetic distances as a proxy of cultural heterogeneity and by using data on genetic distances, we examine the stability of the current map of Europe. We then identify the regions prone to secession and the countries that are more likely to merge. Furthermore, we estimate the welfare gains from European Union membership.

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File URL: http://www.iset.ge/files/003-08.pdf
File Function: First version, 2008
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Paper provided by International School of Economics at TSU, Tbilisi, Republic of Georgia in its series Working Papers with number 003-08.

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Length: 34 pages
Date of creation: Jul 2008
Handle: RePEc:tbs:wpaper:08-003
Contact details of provider: Web page: http://www.iset.ge/

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  1. Gans, Joshua S. & Smart, Michael, 1996. "Majority voting with single-crossing preferences," Journal of Public Economics, Elsevier, vol. 59(2), pages 219-237, February.
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  4. Alberto Alesina & Reza Baqir & William Easterly, 1997. "Public Goods and Ethnic Divisions," NBER Working Papers 6009, National Bureau of Economic Research, Inc.
  5. Wacziarg, Romain & Spolaore, Enrico, 2006. "The Diffusion of Development," Research Papers 1898r1, Stanford University, Graduate School of Business.
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  8. Oded Galor & Quamrul Ashraf, 2007. "Cultural Assimilation, Cultural Diffusion and the Origin of the Wealth of Nations," Working Papers 2007-3, Brown University, Department of Economics.
  9. GINSBURGH, Victor & ORTUNO-ORTIN, Ignatio & WEBER, Shlomo, "undated". "Disenfranchisement in linguistically diverse societies: the case of the European Union," CORE Discussion Papers RP 1773, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  10. Friend, Irwin & Blume, Marshall E, 1975. "The Demand for Risky Assets," American Economic Review, American Economic Association, vol. 65(5), pages 900-922, December.
  11. Greenberg, Joseph, 1977. "Existence of an equilibrium with arbitrary tax schemes for financing local public goods," Journal of Economic Theory, Elsevier, vol. 16(2), pages 137-150, December.
  12. Giuliano, Paola & Spilimbergo, Antonio & Tonon, Giovanni, 2006. "Genetic, Cultural and Geographical Distances," CEPR Discussion Papers 5807, C.E.P.R. Discussion Papers.
  13. Alberto Alesina & William Easterly & Janina Matuszeski, 2011. "Artificial States," Journal of the European Economic Association, European Economic Association, vol. 9(2), pages 246-277, 04.
  14. Tayfun Sönmez & Suryapratim Banerjee & Hideo Konishi, 2001. "Core in a simple coalition formation game," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 18(1), pages 135-153.
  15. Axelrod, Robert & Bennett, D. Scott, 1993. "A Landscape Theory of Aggregation," British Journal of Political Science, Cambridge University Press, vol. 23(02), pages 211-233, April.
  16. BOGOMOLNAIA, Anna & LE BRETON, Michel & SAVVATEEV, Alexei & WEBER, Shlomo, "undated". "Stability under unanimous consent, free mobility and core," CORE Discussion Papers RP 1929, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  17. Andrés Romeu & M. Dolores Collado & Ignacio Ortuño Ortín, 2006. "Vertical Transmission Of Consumption Behavior And The Distribution Of Surnames," Working Papers. Serie AD 2006-09, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  18. Igal Milchtaich & Eyal Winter, 2000. "Stability and Segregation in Group Formation," Discussion Paper Series dp263, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
  19. Philippe Jehiel & Suzanne Scotchmer, 2001. "Constitutional Rules of Exclusion in Jurisdiction Formation," Review of Economic Studies, Oxford University Press, vol. 68(2), pages 393-413.
  20. Bogomolnaia, Anna & Jackson, Matthew O., 2002. "The Stability of Hedonic Coalition Structures," Games and Economic Behavior, Elsevier, vol. 38(2), pages 201-230, February.
  21. Desmet, Klaus & Ortuño-Ortín, Ignacio & Weber, Shlomo, 2005. "Peripheral Diversity and Redistribution," CEPR Discussion Papers 5112, C.E.P.R. Discussion Papers.
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