A Social Contract Approach to the Formation of National Borders

Henry Tam ()

Public Choice, 2004, vol. 118, issue 1_2, 183-209

Abstract: This paper explores an economic model that elucidates the formation of national borders and explains the cross-sectional variance in the size of nations around the world. According to the present social contract approach, risk averse agents try to get out of the ``state of nature'' and get together to form societies to reduce consumption uncertainty, but heterogeneity averse agents will not allow nations to become too large. The model relates the geometry of a nation with the geography of its border and predicts the empirical observation that countries with ``coastline'' borders are larger than ``landlocked'' countries.

Date: 2004
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