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The Economic Approach to Political Borders

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  • Enrico Spolaore

Abstract

This paper overviews theoretical and empirical contributions that study political borders from an economic perspective. It reviews theories of the number and size of nations focused on the trade-off between economies of scale in public-good provision and heterogeneity of preferences over public policies as well as on the factors affecting this trade-off, such as democratization, international openness, and conflict. It also reviews studies of political integration and disintegration that focus on economic inequality, redistribution policies, and the geographical distribution of resources. Finally, the paper discusses recent empirical studies that shed light on the relations among heterogeneity, conflict, and borders. This line of research is part of a growing literature on the interplay between cultural variables and economic and political outcomes.

Suggested Citation

  • Enrico Spolaore, 2022. "The Economic Approach to Political Borders," CESifo Working Paper Series 10165, CESifo.
    • Handle: RePEc:ces:ceswps:_10165
    as

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    References listed on IDEAS

    as
    1. Enrico Spolaore, 2013. "What Is European Integration Really About? A Political Guide for Economists," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 125-144, Summer.
    2. Hans-Joachim Voth, 2013. "The Three Horsemen of Riches: Plague, War, and Urbanization in Early Modern Europe," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(2), pages 774-811.
    3. Alberto Bisin & Thierry Verdier, 2010. "The Economics of Cultural Transmission and Socialization," Post-Print halshs-00754788, HAL.
    4. Gino Gancia & Giacomo A M Ponzetto & Jaume Ventura, 2022. "Globalization and Political Structure," Journal of the European Economic Association, European Economic Association, vol. 20(3), pages 1276-1310.
    5. Ellingsen, Tore, 1998. "Externalities vs internalities: a model of political integration," Journal of Public Economics, Elsevier, vol. 68(2), pages 251-268, May.
    6. Stelios Michalopoulos & Elias Papaioannou, 2016. "The Long-Run Effects of the Scramble for Africa," American Economic Review, American Economic Association, vol. 106(7), pages 1802-1848, July.
    7. Goyal, Sanjeev & Staal, Klaas, 2004. "The political economy of regionalism," European Economic Review, Elsevier, vol. 48(3), pages 563-593, June.
    8. Joan Esteban & Debraj Ray, 2011. "Linking Conflict to Inequality and Polarization," American Economic Review, American Economic Association, vol. 101(4), pages 1345-1374, June.
    9. Haimanko, Ori & Le Breton, Michel & Weber, Shlomo, 2005. "Transfers in a polarized country: bridging the gap between efficiency and stability," Journal of Public Economics, Elsevier, vol. 89(7), pages 1277-1303, July.
    10. Alesina, Alberto & Spolaore, Enrico, 2005. "War, peace, and the size of countries," Journal of Public Economics, Elsevier, vol. 89(7), pages 1333-1354, July.
    11. Michel Le Breton & Shlomo Weber, 2003. "The Art of Making Everybody Happy: How to Prevent a Secession," IMF Staff Papers, Palgrave Macmillan, vol. 50(3), pages 1-4.
    12. Joan Esteban & Laura Mayoral & Debraj Ray, 2012. "Ethnicity and Conflict: An Empirical Study," American Economic Review, American Economic Association, vol. 102(4), pages 1310-1342, June.
    13. Daron Acemoglu & James A. Robinson, 2021. "Culture, Institutions and Social Equilibria: A Framework," NBER Working Papers 28832, National Bureau of Economic Research, Inc.
    14. Wallace E. Oates & Wallace E. Oates, 2004. "An Essay on Fiscal Federalism," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 22, pages 384-414, Edward Elgar Publishing.
    15. Victor Ginsburgh & Shlomo Weber, 2011. "How Many Languages Do We Need? The Economics of Linguistic Diversity," Economics Books, Princeton University Press, edition 1, number 9481.
    16. Donald Wittman, 2000. "The Wealth and Size of Nations," Journal of Conflict Resolution, Peace Science Society (International), vol. 44(6), pages 868-884, December.
    17. Weingast, Barry R, 1995. "The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 11(1), pages 1-31, April.
    18. Enrico Spolaore, 2020. "Commanding Nature by Obeying Her: A Review Essay on Joel Mokyr's A Culture of Growth," Journal of Economic Literature, American Economic Association, vol. 58(3), pages 777-792, September.
    19. Enrico Spolaore, 2004. "Economic Integration, International Conflict and Political Unions," Rivista di Politica Economica, SIPI Spa, vol. 94(5), pages 3-50, September.
    20. Alesina, Alberto & Wacziarg, Romain, 1998. "Openness, country size and government," Journal of Public Economics, Elsevier, vol. 69(3), pages 305-321, September.
    21. Fearon, James D, 2003. "Ethnic and Cultural Diversity by Country," Journal of Economic Growth, Springer, vol. 8(2), pages 195-222, June.
    22. Robert P. Inman & Daniel L. Rubinfeld, 2005. "Federalism and the Democratic Transition: Lessons from South Africa," American Economic Review, American Economic Association, vol. 95(2), pages 39-43, May.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    borders; economies of scale; public goods; federalism; decentralization; ethnicity; culture; conflict;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative
    • P00 - Political Economy and Comparative Economic Systems - - General - - - General

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