Economic Integration and Political Disintegration

Enrico Spolaore, Alberto Alesina and Romain Wacziarg

American Economic Review, 2000, vol. 90, issue 5, 1276-1296

Abstract: In a world of trade restrictions, large countries enjoy economic benefits, because political boundaries determine the size of the market. Under free trade and global markets even relatively small cultural, linguistic or ethnic groups can benefit from forming small, homogeneous political jurisdictions. This paper provides a formal model of the relationship between openness and the equilibrium number and size of countries, and successfully tests two implications of the model. Firstly, the economic benefits of country size are mediated by the degree of openness to trade. Secondly, the history of nation-state creations and secessions is influenced by the trade regime.

JEL-codes: F02 F15 F41 N40 (search for similar items in EconPapers)
Date: 2000
Note: DOI: 10.1257/aer.90.5.1276
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Citations: View citations in EconPapers (369)

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Working Paper: Economic Integration and Political Disintegration (2000)
Working Paper: Economic Integration and Political Disintegration (1997)
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