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Stability of Nations and Genetic Diversity

Klaus Desmet (), Michel Le Breton, Ignacio Ortuno-Ortin () and Shlomo Weber ()
Additional contact information
Michel Le Breton: Universite de Toulouse I, GREMAQ and IDEI, Toulouse, France
Ignacio Ortuno-Ortin: Universidad Carlos III, Getafe (Madrid), Spain
Shlomo Weber: Southern Methodist University, Dallas, USA, CORE, Catholic University of Louvain, Louvain-la-Neuve, Belgium, and CEPR

Authors registered in the RePEc Author Service: Ignacio Ortuno Ortin

No 003-08, Working Papers from International School of Economics at TSU, Tbilisi, Republic of Georgia

Abstract: This paper presents a model of nations where culturally heterogeneous 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 secession or unification. We provide empirical support for choosing genetic distances as a proxy of cultural heterogeneity and by using data on genetic distances, we examine the stability of the current map of Europe. We then identify the regions prone to secession and the countries that are more likely to merge. Furthermore, we estimate the welfare gains from European Union membership.

Keywords: nation formation; genetic diversity; cultural heterogeneity; secession; European Union (search for similar items in EconPapers)
JEL-codes: H77 D70 F02 H40 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2008-07
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