Journal of Economic Growth

, Volume 10, Issue 4, pp 331–386

Borders and Growth

  • Enrico Spolaore
  • Romain Wacziarg
Article

DOI: 10.1007/s10887-005-4719-6

Cite this article as:
Spolaore, E. & Wacziarg, R. J Econ Growth (2005) 10: 331. doi:10.1007/s10887-005-4719-6

This paper presents a framework to understand and measure the effects of political borders on economic growth and per capita income levels. In our model, political integration between two countries results in a positive country size effect and a negative effect through reduced openness vis-à-vis the rest of the world. Additional effects stem from possible changes in other growth determinants, besides country size and openness, when countries are merged. We estimate the growth effects that would have resulted from the hypothetical removal of national borders between pairs of adjacent countries under various scenarios. We identify country pairs where political integration would have been mutually beneficial. We find that full political integration would have slightly reduced an average country's growth rate, while most countries would benefit from a more limited form of merger, involving higher economic integration with their neighbors.

Keywords

economic integration political unions growth 

JEL classification

F1 O5 

Copyright information

© Springer Science+Business Media, Inc. 2005

Authors and Affiliations

  • Enrico Spolaore
    • 1
  • Romain Wacziarg
    • 2
  1. 1.Department of EconomicsTufts UniversityMedfordUSA
  2. 2.Stanford Graduate School of BusinessStanfordUSA

Personalised recommendations