Publication: The stability and breakup of nations : a quantitative analysis
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2011-08-18
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Springer Verlag
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Abstract
This paper quantitatively analyzes the stability and breakup of nations. The
tradeoff between increasing returns in the provision of public goods and the costs of greater
cultural heterogeneity mediates agents’ preferences over different geographical configura-
tions, thus determining the likelihood of secessions and unions. After calibrating the model
to Europe, we identify the regions prone to secession and the countries most likely to merge.
We then estimate the implied monetary gains from EU membership. As a test of the theory,
we show that the model can account for the breakup of Yugoslavia and the dynamics of its
disintegration.We find that economic differences between theYugoslav republics determined
the order of disintegration, but cultural differences, though small, were key to the country’s
instability. The paper also provides empirical support for the use of genetic distances as a
proxy for cultural heterogeneity
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Keywords
Nation formation, Genetic diversity, Cultural heterogeneity, Secession, Unification, Europe, Yugoslavia
Bibliographic citation
Journal of Economic Growth, 2011, v. 16, n. 3, pp. 183-213