Globalization and political structure

Gino Gancia, Giacomo Ponzetto and Jaume Ventura ()
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Jaume Ventura: https://www.upf.edu/web/econ/faculty/-/asset_publisher/6aWmmXf28uXT/persona/id/3418977

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

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 declining transport costs. 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, instead, it consists of removing the cost of borders by creating international unions. This leads to a reduction in country size. Moreover, diplomacy replaces conquest as a tool to ensure market access. These predictions are consistent with historical evidence on trade, territorial changes and membership of international unions.

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: 2016-08, Revised 2021-10
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 (9)

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Related works:
Journal Article: Globalization and Political Structure (2022)
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 (2016)
Working Paper: Globalization and Political Structure (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:1513

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