The Stability and Breakup of Nations: A Quantitative Analysis
Klaus Desmet (),
Michel Le Breton,
Ignacio Ortuno-Ortin and
Authors registered in the RePEc Author Service: Ignacio Ortuno Ortin
Working Papers of VIVES - Research Centre for Regional Economics from KU Leuven, Faculty of Economics and Business (FEB), VIVES - Research Centre for Regional Economics
This paper presents a model of nations where agents vote on the optimal level of public spending. Larger nations benefit from increasing returns in the provision of public goods, but bear the costs of greater cultural heterogeneity. This tradeoff induces agents' preferences over different geographical configurations, thus determining the likelihood of secessions or unions. After calibrating the model to Europe, we identify the regions prone to secession and the countries most likely to merge. As a test of the theory, we show that the model can account for the breakup of Yugoslavia and the dynamics of its disintegration. We also provide empirical support for the use of genetic distances as a proxy for cultural heterogeneity.
Keywords: nation formation; genetic diversity; cultural heterogeneity; secession; unification; Europe; Yugoslavia. (search for similar items in EconPapers)
JEL-codes: H77 D70 F02 H40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe
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Journal Article: The stability and breakup of nations: a quantitative analysis (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ete:vivwps:10
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