A tale of two gravities*

Abstract

Throughout history, goods have flowed across countries to balance supply and demand. Territories have likewise flowed. Unlike goods, territories flow only in terms of sovereignty, but like goods, their flows are driven by the decisions of rational actors. In peaceful times, countries redraw borders in exchange for economic and political benefits. In times of war, countries fight each other for territories they covet. In interim periods, following war and before peace is established, countries negotiate treaties to convert territories they occupied in the war into equivalent interests. This paper aims to rationalize the bilateral territory flows across countries. We find that the gravity model, originally built for modeling the goods flows across countries, also explains territory flows. As a namesake of Newton's third law, the gravity model predicts that the volumes of goods flows are