In this paper we introduce the stability threshold that quantifies the minimal returns to size sufficient to prevent credible secession threats by regions of the country. Severity of internal tension has been linked to degree of polarization of citizens’ preferences and characteristics. We show that the increasing degree of polarization does not, in general, raise the stability threshold, even though this hypothesis holds in some asymptotic sense. We also examine the question of the number of smaller countries to be created if the unity of the large country is not sustainable, and investigate the link between this number and the degree of the country polarization.
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JEL Classification Numbers H20, D70, D73
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Haimanko, O., Breton, M.L. & Weber, S. The stability threshold and two facets of polarization. Economic Theory 30, 415–430 (2007). https://doi.org/10.1007/s00199-005-0069-z
- Stability threshold