Country size and publicly provided goods

Klaas Staal

Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: This paper studies the equilibrium size of countries. Individuals in small countries have greater influence over the nature of political decision making while individuals in large countries have the advantage of more public goods and lower tax rates. The model implies that (i) there exists excessive incentives to separate, though this need not be the case for all sets of secession rules studied; (ii) an exogenous increase in public spending decreases country size; (iii) countries with a presidential-congressional democracy are larger than countries with a parliamentary democracy.

Keywords: country size; public spending; structure of government (search for similar items in EconPapers)
JEL-codes: D7 H1 H2 H7 (search for similar items in EconPapers)
Date: 2006-12
New Economics Papers: this item is included in nep-cdm and nep-pbe
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Persistent link: https://EconPapers.repec.org/RePEc:trf:wpaper:187

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