Size Of States Essay

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States vary in size, from Russia’s seventeen million square kilometers (27.4 million square miles) and China’s 1.3 billion people to Nauru’s twenty-one square kilometers (thirteen square miles) and ten thousand people. The puzzles of why there is so much variation and whether there is a generalizable explanation for state size are important ones, because the answers could shed light on why the world looks the way it does today and also explain ongoing changes such as the growth of the European Union or the potential dissolution of Canada, Iraq, or Russia.

Alesina and Spolaore (2003) develop a general explanation for state size starting with two premises: States produce local public goods, and citizens have tastes for different kinds of public goods. Local public goods, like defense and market regulations, can be supplied at a lower cost per citizen as the number of citizens increases. Differing tastes, however, are a source of inefficiency for ever-larger states, because citizens with different preferences for how the economy should be regulated or how defense should be provided will end up getting a kind of government very different than the one they would ideally prefer, giving them an incentive to break off and start their own states.

Several conclusions follow from the formal model. When the risk of war is low, states will be smaller because there will be less of a gain from common defense. Likewise, if the world trading system is generally open, states will be smaller because they no longer need to provide a large common market internally. Democracies will be smaller than autocracies, because citizens in a democratic periphery will vote to secede when they would be better off supplying a public good that suits their tastes, while citizens in an autocratic periphery will be coerced into staying. Those states that are larger will tend to be homogenous, indicating similar preferences over a large population. These conclusions generally match the experience of the 1990s, when smaller states emerged after the end of the Soviet Union and the further opening of world markets.

Similar arguments include ones that emphasize trade routes and state administration. David Friedman (1977) observes that multiple states along a single trade route will overtax the route in a tragedy of the commons, while multiple states along parallel trade routes will under tax them in a race to the bottom; evidence from early modern Europe suggests that states will therefore grow to encompass an entire network of routes. David Lake and Angela O’Mahony (2004) also posit that states will be larger when they require valuable fixed investments such as railroads.

An alternate approach emphasizes identity rather than political economy. Alexander Wendt (2003) argues that states, like people, seek to be acknowledged as members of a community. Being admitted into a club not only confers status but also serves as a marker that validates a state as being a member of an in-group. States seeking acknowledgment by peers continue to formalize their relationships until, eventually, they federate. This argument, which does not posit an upper limit on state size and so cannot account for dissolutions, has not been empirically tested, and its final conclusion—an eventual, inevitable world government—has not been realized.

Some empirical evidence suggests that states form in response to considerations of scale economies as well as homogeneity, and by some measures scale economies (such as presence of railroad networks) are related to the average size of new countries over time. A historical survey of federations suggests that the need for common defense may have been behind decisions by some states to voluntarily unify, but no such surveys have included control groups. Other empirical studies have failed to find clear evidence that size matters, because small countries seem no worse off on average than large countries, by a variety of economic and social measures. Furthermore, there is little cross-national evidence that the theorized efficiencies to a particular size are felt by leaders or decision makers who then take action to bring their states to the optimal size.

A challenge for theories of state size is that these theories often have difficulty accounting for why states adjust their borders when they could, or as an alternative, achieve the benefits of scale in some other way. States needing to pool their resources for common defense or market gains can simply form alliances or customs unions, or coerce partners into cooperating with them. Some scholars speculate that integration and dissolution may be driven as much by commitment problems as by underlying interests in size. At the very least, however, size of states studies such as Alesina and Spolaore set important necessary conditions for theories of why states take the shapes they do.

Bibliography:

  1. Alesina, Alberto, and Enrico Spolaore. The Size of Nations. Cambridge: MIT Press, 2003.
  2. Friedman, David. “A Theory of the Size and Shape of Nations.” Journal of Political Economy 85, no. 1 (1977): 59–77.
  3. Lake, David, and Angela O’Mahony. “The Incredible Shrinking State: Explaining the Territorial Size of Countries.” Journal of Conflict Resolution 48, no. 5 (2004): 699–722.
  4. Ordeshook, Peter C., and Emerson Niou. “Alliances versus Federations: An Extension of Riker’s Analysis of Federal Formation.” Constitutional Political Economy 9 (1998): 271–288.
  5. Riker,William H. The Development of American Federalism. Boston: Kluwer, 1987.
  6. Rose, Andrew K. Size Really Doesn’t Matter: In Search of a National Scale Effect. National Bureau of Economic Research Working Paper 12191, 2006.
  7. Wendt, Alexander. “Why a World State Is Inevitable.” European Journal of International Relations 9, no. 4 (2003): 491–542.
  8. Wittman, Donald. “Nations and States: Mergers and Acquisitions; Dissolutions and Divorce.” American Economic Review 81, no. 2 (1991): 126–129.

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