February 7, 2010

WHAT'S THE ONLY THING BETTER THAN THE UNITED STATES OF AMERICA?:

The size of nations (Andrew Leigh, 8 February 2010, Online Opinion)

n The Size of Nations, Alberto Alesina (Harvard) and Enrico Spolaore (Tufts) present a theory of country size that is as simple as it is powerful. In determining how big countries should be (and therefore how many countries there are in the world), they argue that there are two opposing forces. For economic reasons, nations should be big. For political reasons, countries should be small.

Economics favours large nations because it means more of us share the costs of running the central bank, paying for embassies, and maintaining an air force. And because commerce is easier within borders than across them, businesses are more likely to prosper in a big nation than a small one.

But politics drives towards smaller nations because large nations are hard to control. Smaller nations are more homogenous on several dimensions. Incomes tend to be more equally distributed, there is less ethnic and racial tension, and people are more likely to share a common language and religion. It’s a lot easier to find common ground when you’re the President of Costa Rica than if you happen to be President of the United States.

Sure, you say, but why are countries these days breaking up quicker than a Hollywood marriage?

The answer is that the two great forces of the post-war era - globalisation and democratisation - both favour smaller nations. Globalisation does it by making secession more attractive. In 1950, when average tariffs were around 40 per cent, regions paid a large price for going it alone. Now that the average tariff is around 5 per cent, breaking up is easier to do.

Democratisation raises the pressure to split off because it gives voice to regional interests.


Ten USA's.

Posted by Orrin Judd at February 7, 2010 8:49 PM
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