Patrick Bolton

The Breakup of Nations: A Political Economy Analysis

Coauthor(s): Gerard Roland.

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Abstract:
This paper develops a model of the breakup or unification of nations. In each nation the decision to separate is taken by majority voting. A basic trade-off between the efficiency gains of unification and the costs in terms of loss of control on political decisions is highlighted. The model emphasizes political conflicts over redistribution policies. The main results of the paper are i) when income distributions vary across regions and the efficiency gains from unification are small, separation occurs in equilibrium; and ii) when all factors of production are perfectly mobile, all incentives for separation disappear.

Source: Quarterly Journal of Economics
Exact Citation:
Bolton, Patrick, and Gerard Roland. "The Breakup of Nations: A Political Economy Analysis." Quarterly Journal of Economics 112, no. 4 (November 1997): 1057-90.
Volume: 112
Number: 4
Pages: 1057-90
Date: 11 1997