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The Economics of Political Borders

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  • Enrico Spolaore

Abstract

This paper presents concepts from economic analysis that shed light on the formation and breakup of sovereign states. First, we discuss the key trade-off between economies of scale in the provision of public good and political costs from heterogeneity of preferences. Second, we present four economic perspectives on the formation of borders: efficient borders, borders as democratic outcomes, borders in a world of rent-seeking Leviathans, and borders as outcomes of conflict and wars. Finally, we provide an analytical illustration of the basic ideas within a simple framework.

Suggested Citation

  • Enrico Spolaore, 2012. "The Economics of Political Borders," Discussion Papers Series, Department of Economics, Tufts University 0767, Department of Economics, Tufts University.
    • Handle: RePEc:tuf:tuftec:0767
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    References listed on IDEAS

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    1. Jordan Adamson & Erik O. Kimbrough, 2018. "The Supply Side Determinants of Territory and Conflict," Working Papers 18-10, Chapman University, Economic Science Institute.
    2. Qiang Chen, 2014. "Natural Disasters, Ethnic Diversity, and the Size of Nations: Two Thousand Years of Unification and Division in Historical China," SDU Working Papers 2014-01, School of Economics, Shandong University.

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    JEL classification:

    • N41 - Economic History - - Government, War, Law, International Relations, and Regulation - - - U.S.; Canada: Pre-1913

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