The Size of Nations
The authors of this timely and provocative book use the tools of economic analysis to examine the formation and change of political borders. They argue that while these issues have always been at the core of historical analysis, international economists have tended to regard the size of a country as "exogenous," or no more subject to explanation than the location of a mountain range or the course of a river. Alesina and Spolaore consider a country's borders to be subject to the same analysis as any other man-made institution. In The Size of Nations, they argue that the optimal size of a country is determined by a cost-benefit trade-off between the benefits of size and the costs of heterogeneity. In a large country, per capita costs may be low, but the heterogeneous preferences of a large population make it hard to deliver services and formulate policy. Smaller countries may find it easier to respond to citizen preferences in a democratic way. Alesina and Spolaore substantiate their analysis with simple analytical models that show how the patterns of globalization, international conflict, and democratization of the last two hundred years can explain patterns of state formation. Their aim is not only "normative" but also "positive" -- that is, not only to compute the optimal size of a state in theory but also to explain the phenomenon of country size in reality. They argue that the complexity of real world conditions does not preclude a systematic analysis, and that such an analysis, synthesizing economics, political science, and history, can help us understand real world events.
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A-stable Alesina analysis areas assume autarky average utility B-jurisdictions bargain benefits breakup central government chapter citizens city-states coalition-proof Coase theorem configuration of borders configuration of countries constraint correlation costs of heterogeneity coun countries of equal country's currency deadweight losses decentralization defense per capita defense spending democratic discussion distance distribution economic integration economies of scale effect efficient empires endogenous equation equilibrium number Europe European Union example external federal Federalist paper fiscal fiscal federalism formation free trade given growth heterogeneity costs heterogeneity of preferences higher implies income increase independent individuals interaction international conflict issue large countries larger Leviathan located maximize median voter military Nash equilibrium nomic number of countries openness optimal number overlapping jurisdictions policies political borders population proposition protectionist redistributive reduce regions relatively result secession share small countries smaller Soviet Union Spolaore supranational tion trade-off unification United variables voting equilibrium Wacziarg welfare
Page 3 - Extend the sphere, and you take in a greater variety of parties and interests; you make it less probable that a majority of the whole will have a common motive to invade the rights of other citizens; or if such a common motive exists, it will be more difficult for all who feel it to discover their own strength, and to act in unison with each other.
Page 3 - The influence of factious leaders may kindle a flame within their particular States, but will be unable to spread a general conflagration through the other States. A religious sect may degenerate into a political faction in a part of the Confederacy; but the variety of sects dispersed over the entire face of it must secure the national councils against any danger from that source* A rage for paper money, for an abolition of debts, for an equal division of property...
Page 1 - A nation is a group of people united by a common error about their ancestry and a common dislike of their neighbors.
Page 8 - Every now and then the scientific theories of economics and sociology are challenged as disregarding certain particulars. That, instead, is a merit. One must first obtain a general concept of the thing one is studying, disregarding details, which for the moment are taken as perturbations; and then come to particulars afterwards, beginning with the more important and proceeding successively towards the less important.2 541.