On the Number and Size of Nations

Alesina, Alberto; Spolaore, Enrico

doi:10.3386/w5050

Cited by 358 publications

(615 citation statements)

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“…Federal policy makers with these equity concerns may choose to be more aggressive in extending aid directly to localities. However, fiscal decentralization risks undermining the benefits that derive from economies of scale within government, resulting in higher average costs for residents as a whole even if some traditionally underserved regions benefit (Alesina and Spolaore 1997). Local governments may not have the capacity to take on new responsibilities without great expense.…”

Section: Resultsmentioning

confidence: 99%

Capital cities: a special case in urban development

Turner

2009

Ann Reg Sci

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Section: Resultsmentioning

confidence: 99%

Capital cities: a special case in urban development

Turner

2009

Ann Reg Sci

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“…The recent literature has claimed that cross-country differences in ethnic diversity explain a substantial part of cross-country differences in public policies, political instability and other economic factors associated with long-run growth (see Easterly and Levine 1997). Political economy models suggest that polarized societies will be both prone to competitive rent-seeking by different groups and have difficulty agreeing on public goods like infrastructure, education and good policies (Alesina and Drazen 1991;Shleifer and Vishny 1993;Alesina and Spolaore 1997). Alesina and Drazen (1991) describe how a war of attrition between interest groups can postpone macroeconomic stabilization.…”

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confidence: 98%

Corruption, growth and ethnic fractionalization: a theoretical model

2011

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This paper analyzes the existing relationship between ethnic fractionalization, corruption and the growth rate of a country. We provide a simple theoretical model. We show that a nonlinear relationship between fractionalization and corruption exists: corruption is high in homogeneous or very fragmented countries, but low where fractionalization is intermediate. In fact, when ethnic diversity is intermediate, constituencies act as a check and balance device to limit ethnically-based corruption. Consequently, the relationship between fractionalization and growth rate is also non-linear: growth is high in the middle range of ethnic diversity, low in homogeneous or very fragmented countries

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“…Alesina and Spolaore (1997), for example, develop a Hotelling-type model where the optimal size of a country is determined, at given levels of international trade, by two countervailing effects: On the one hand, the size of the market and thus the ability to exploit scale economies increases in country size; on the other hand, citizens experience greater ''preference costs'' in larger countries because public goods are ''farther away''. Within this framework, economic integration reduces the relative benefits of a large country size by allowing access to foreign markets.…”

Section: Economic Integration and Fiscal Decentralization: Theoreticamentioning

confidence: 99%