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The Political Economy of Regionalism

Listed author(s):
  • Sanjeev Goyal

    ()

    (Econometric Institute, Erasmus University Rotterdam)

  • Klaas Staal

    ()

    (Econometric Institute, Erasmus University Rotterdam)

We examine the incentives of regions in a country to unite or toseparate. We find that smaller regions have greater incentives tounite, relative to larger regions. We show, however, that on thewhole, majority voting on separation and union generates excessiveincentives to separate. This leads us to examine the scope ofalternative political institutions and rules in overcoming thepotential inefficiency. Our paper also provides a wide range ofexamples to illustrate the different institutions used in actualpractice to resolve such problems.

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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 00-014/1.

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Date of creation: 02 Mar 2000
Handle: RePEc:tin:wpaper:20000014
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  1. Alberto Alesina & Enrico Spolaore, 1997. "On the Number and Size of Nations," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1027-1056.
  2. Salvador Barberà & Matthew O. Jackson, 2000. "Choosing How to Choose: Self-Stable Majority Rules and Constitutions," Working Papers 57, Barcelona Graduate School of Economics.
  3. Enrico Spolaore & Alberto Alesina & Romain Wacziarg, 2000. "Economic Integration and Political Disintegration," American Economic Review, American Economic Association, vol. 90(5), pages 1276-1296, December.
  4. Bolton, Patrick & Roland, Gerard & Spolaore, Enrico, 1996. "Economic theories of the break-up and integration of nations," European Economic Review, Elsevier, vol. 40(3-5), pages 697-705, April.
  5. Bewley, Truman F, 1981. "A Critique of Tiebout's Theory of Local Public Expenditures," Econometrica, Econometric Society, vol. 49(3), pages 713-740, May.
  6. Wildasin, David E., 1988. "Nash equilibria in models of fiscal competition," Journal of Public Economics, Elsevier, vol. 35(2), pages 229-240, March.
  7. Austin, D. Andrew, 1995. "Coordinated action in local public goods models: The case of secession without exclusion," Journal of Public Economics, Elsevier, vol. 58(2), pages 235-256, October.
  8. Rubinfeld, Daniel L., 1987. "The economics of the local public sector," Handbook of Public Economics,in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 2, chapter 11, pages 571-645 Elsevier.
  9. Salvador Barbera & Matthew O. Jackson, 2004. "Choosing How to Choose: Self-Stable Majority Rules and Constitutions," The Quarterly Journal of Economics, Oxford University Press, vol. 119(3), pages 1011-1048.
  10. 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.
  11. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
  12. Alessandra Casella & Jonathan S. Feinstein, 1990. "Public Goods in Trade: On the Formation of Markets and Political Jurisdictions," NBER Working Papers 3554, National Bureau of Economic Research, Inc.
  13. Dagan, Nir & Volij, Oscar, 2000. " Formation of Nations in a Welfare-State Minded World," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 2(2), pages 157-181.
  14. Epple, Dennis & Romer, Thomas, 1991. "Mobility and Redistribution," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 828-858, August.
  15. Besley, Timothy & Coate, Stephen, 1998. "Sources of Inefficiency in a Representative Democracy: A Dynamic Analysis," American Economic Review, American Economic Association, vol. 88(1), pages 139-156, March.
  16. Alesina, Alberto & Wacziarg, Romain, 1998. "Openness, country size and government," Journal of Public Economics, Elsevier, vol. 69(3), pages 305-321, September.
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