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The authors of this timely and provocative
book use the tools of economic analysis to examine the formation
and change of political borders. They argue that while these
issues have always been at the core of historical analysis,
international economists have tended to regard the size
of a country as "exogenous," or no more subject
to explanation than the location of a mountain range or
the course of a river. Alesina and Spolaore consider a country's
borders to be subject to the same analysis as any other
man-made institution. In The Size of Nations they
argue that the optimal size of a country is determined by
a cost-benefit trade-off between the benefits of size and
the costs of heterogeneity. In a large country, per capita
costs may be low, but the heterogeneous preferences of a
large population make it hard to deliver services and formulate
policy. Smaller countries may find it easier to respond
to citizen preferences in a democratic way.
Alesina and Spolaore substantiate their
analysis with simple analytical models that show how the
patterns of globalization, international conflict, and democratization
of the last two hundred years can explain patterns of state
formation. Their aim is not only "normative" but
also "positive" -- that is, not only to compute
the optimal size of a state in theory but also to explain
the phenomenon of country size in reality.
Alberto Alesina is Professor of Economics
and Government at Harvard University. Enrico Spolaore is
Professor of Economics at Tufts University.
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