Globalization and Political Structure

Giacomo Ponzetto, Gino Gancia and Jaume Ventura

No 11159, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper develops a theoretical framework to study the interaction between globalization and political structure. We show that political structure adapts in a non-monotonic way to technological progress that expands opportunities for global trade. Borders hamper trade. At an earlier stage, the political response to expanding trade opportunities consists of removing borders by increasing country size. At a later stage, however, the political response to expanding trade opportunities is to remove borders by creating international unions, and this leads to a reduction in country size. Moreover, negotiation replaces war as a tool to ensure market access. These predictions are consistent with historical evidence on trade, territorial expansion and war.

Keywords: Globalization; Political structure; Size of countries; International unions (search for similar items in EconPapers)
JEL-codes: D71 F15 F55 H77 O57 (search for similar items in EconPapers)
Date: 2016-03
New Economics Papers: this item is included in nep-int and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Journal Article: Globalization and Political Structure (2022)
Working Paper: Globalization and political structure (2021)
Working Paper: Globalization and political structure (2017)
Working Paper: Globalization and Political Structure (2016)
Working Paper: Globalization and Political Structure (2016)
Working Paper: Globalization and Political Structure (2014)
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