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The Size of Nations

par Alberto Alesina

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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. They argue that the complexity of real world conditions does not preclude a systematic analysis, and that such an analysis, synthesizing economics, political science, and history, can help us understand real world events.… (plus d'informations)
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This book offers a lot of modeling but very little understanding. The authors' basic argument is simple; some public goods are cheaper when provided on a large scale, which makes big states more efficient; on the other hand citizen preferences are more heterogeneous in larger states - they can be more easily reconciled in smaller ones. The authors posit that there is an optimal size somewhere between the extremes, determined by this efficiency / cohesion tradeoff. As a speculative hypothesis this even provides a fairly interesting framework for the historical discussion of state size in Europe in chapter 11.

However, historical analyses are unfortunately overshadowed by mathematical modeling in all the other chapters. The authors believe that the tradeoff can be used to 'explain' various aspects of state size. They derive a large set of mathematical equations which supposedly describe their relationships formally. However, the simplifications and assumptions behind the equations are extremely unrealistic, and consequently the derivations become vacuous formal exercises which yield absolutely no information of interest. I can't believe that professional academics waste their time, and fill their books, with such utterly pointless work.

Of course models are idealizations and they can be informative even if they don't correspond exactly to reality, as the authors note in defence of their method. But come on, sociology and history have limits where further abstraction becomes counterproductive. The authors probably crossed these limits so long ago, and are now so far beyond them, that they no longer remember where they lie. The benefits and drawbacks of small and large states are interesting topics for a historical discussion, and maybe a philosophical one as well. But it is simply not a good subject for mathematical analysis. That much quickly becomes clear to readers of this book, if not to its authors.
  thcson | Dec 19, 2014 |
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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. They argue that the complexity of real world conditions does not preclude a systematic analysis, and that such an analysis, synthesizing economics, political science, and history, can help us understand real world events.

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