Globalization and Political Structure

Gino Gancia, Giacomo Ponzetto and Jaume Ventura

No 22046, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: D71 F15 F55 H77 O57 (search for similar items in EconPapers)
Date: 2016-02
New Economics Papers: this item is included in nep-int
Note: EFG
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Citations: View citations in EconPapers (12)

Published as Gino Gancia & Giacomo A M Ponzetto & Jaume Ventura, 2022. "Globalization and Political Structure," Journal of the European Economic Association, vol 20(3), pages 1276-1310.

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Related works:
Journal Article: Globalization and Political Structure (2022)
Working Paper: Globalization and political structure (2021)
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 (2014)
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