The Stability and Breakup of Nations: A Quantitative Analysis

Klaus Desmet, Michel Le Breton, Ignacio Ortuno-Ortin and Shlomo Weber
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

Abstract: 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: D70 F02 H40 H77 (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-pbe
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Citations: View citations in EconPapers (15)

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http://feb.kuleuven.be/VIVES/publicaties/discussio ... iscussionpaper10.pdf

Related works:
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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