TY  - JOUR
AU  - Alesina,Alberto
AU  - Spolaore,Enrico
AU  - Wacziarg,Romain
TI  - Economic Integration and Political Disintegration
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6163
PY  - 1997
Y2  - September 1997
UR  - http://www.nber.org/papers/w6163
L1  - http://www.nber.org/papers/w6163.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
8 Upper Campus Road
Medford, MA 02155
Tel: 617/627-4068
Fax: 617/627-3917
E-Mail: enrico.spolaore@tufts.edu

Romain Wacziarg
Anderson School of Management at UCLA
C-510 Entrepreneurs Hall
110 Westwood Plaza
Los Angeles, CA 90095-1481
Tel: 310 825 4507
E-Mail: wacziarg@ucla.edu
AB  - Trade liberalization and political separatism go hand in hand.  In a world of trade restrictions, large countries enjoy economic benefits because political boundaries determine the size of the market.  In a world of free trade and global markets even relatively small cultural, linguistic or ethnic groups can benefit from forming small and homogeneous political jurisdictions that trade peacefully and are economically integrated with others.  This paper provides a formal model of the relationship between openness and the equilibrium number and size of countries, and successfully tests two implications of the model.  The first one is that the economic benefits of country size depend on and are mediated by the degree of openness to trade. The second is that the history of Nation-State creations and secessions is influenced by the trade regime.
ER  -