TY  - JOUR
AU  - Alesina,Alberto
AU  - Spolaore,Enrico
TI  - On the Number and Size of Nations
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5050
PY  - 1995
Y2  - March 1995
UR  - http://www.nber.org/papers/w5050
L1  - http://www.nber.org/papers/w5050.pdf
N1  - Author contact info:
Alberto F. Alesina
Department of Economics
Harvard University
Littauer Center 210
Cambridge, MA 02138
Tel: 617/495-8388
Fax: 617/495-7730
E-Mail: aalesina@harvard.edu

Enrico Spolaore
Department of Economics
Tufts University
Braker Hall 315
8 Upper Campus Road
Medford, MA 02155
Tel: 617/627-4068
Fax: 617/627-3917
E-Mail: enrico.spolaore@tufts.edu
AB  - This paper studies the equilibrium determination of the number of political jurisdictions in different political regimes, democratic or not, and in different economic environments, with more or less economic integration.  We focus on the trade off between the benefits of large jurisdictions in terms of economies of scale and the costs of heterogeneity of large and diverse populations.  Our model implies that: i) democratization leads to secessions; ii) without an appropriate redistributive scheme (which we characterize) in equilibrium one observes an inefficiently large number of countries; iii) the equilibrium number of countries is increasing in the amount of economic integration.  We also study the welfare effects of economic integration and free trade when the number of countries is endogenous.
ER  -