ECONOMY

chapter 43
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NATIONAL
BORDERS AND THE
SIZE OF NATIONS
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enrico spolaore
1 Introduction
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The formation, consolidation, and break-up of states has been at the center of human
history for thousands of years, from Hammurabi’s unification of Mesopotamia to the
recent collapse of the Soviet Union and Yugoslavia. Currently in the world there are
almost 200 nations, some as large as China or India, others as small as San Marino or
Tuvalu. 1
Questions on the number and size of states have been debated for almost as long
as states themselves exist. 2 Plato in The Laws even calculated the “optimal size” of
a polity (5,040 heads of family), although he also pointed out that “the number
of citizens should be sufficient to defend themselves against the injustice of their
neighbors.” Aristotle in The Politics argued that a state should be no larger than a
size in which everybody knows each other, and claimed that “experience has shown
that it is difficult, if not impossible, for a populous state to be run by good laws.”
Montesquieu in The Spirit of the Laws wrote that “in a small republic, the public good
∗ I am grateful to the University of Munich’s Center for Economic Studies (CES) for its hospitality
while I completed the first draft of this chapter. I thank the editors, and seminar participants at George
Mason University, for useful comments. The usual disclaimer applies.
¹ By “nation” in this chapter we mean internationally recognized “sovereign state,” as commonly
understood in English when one speaks of international trade or United Nations.
² For a discussion of the older political literature on the size of states see Dahl and Tufte 1973.
Historical studies of nationalism include Hobsbawn 1990 and Anderson 1991.