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What is the optimal size of a country?

Numerous interesting comments on previous posts expressed every possible theory. The topic is complicated, but here are a few brief responses:

Bigger (in the sense of population size, not land area) is better, because of economies of scale. Imagine that a country builds an expensive asteroid warning system that protects the territory from asteroids. The system has a large fixed cost. The greater the population, the less each person needs to contribute to the protection system. Large countries also can have larger markets, allowing for greater division of labor, and hence greater wealth. In a phrase, enormousness is not an enormity.

However, maybe small countries can obtain these economies of scale by contracting with each other. Countries can, by treaty, share the costs of asteroid warning systems and enter trade treaties that provide for the reduction of tariffs. Still, countries have trouble entering treaties and (especially) ensuring compliance, because no external power can force countries to comply with treaties. Evidence suggests that even when trade barriers are eliminated, trade across borders is more expensive than trade within borders, no doubt because of the difficulty of dealing with two separate legal systems with their often conflicting requirements.

Smaller is better, because of heterogeneity. As countries become bigger, they become more diverse, and diverse people have different preferences for political outcomes -- taxes, environmental regulation, social welfare, and so forth. As people's preferences diverge, political bargains are harder to make; either agreement can't be reached, or transfers to losers must be arranged, and these transfers are economically costly. One might fear that people lose the ability to monitor leaders as the population increases, and so leaders can pursue self-aggrandizing or redistributive policies with little fear of political sanction. Still, maybe diversity brings benefits -- cultural and economic -- and it is possible, as Madison thought, that groups have more trouble taking control of the political system in a large polity.

Should we cheer whenever an ethnic minority obtains independence for its small or infinitesimal territory? Maybe if it the majority treated it badly. But note that when a minority breaks off from an otherwise adequately governed state, its gains (in the form of greater control over political outcomes in the territory it occupies) come at the expense of the people left in the rump territory, who lose the economies of scale associated with the larger population. There is no natural stopping point to this process if any group can separate for any reason. In an ideal world, other nation states might be skeptical of attempts to secede for this reason, plus the additional important reason that it is harder to cooperate with two little states than one big state, holding constant the effectiveness of the government.

Readers interested in these questions should consult this book, on which I have (loosely) relied.

Smokey:
For some reason, in the concern over small minorities, the article reminded me of this:
The smallest minority on earth is the individual.

Those who deny individual rights cannot claim to be defenders of minorities.


-- Ayn Rand
8.28.2008 11:25pm
Sasha Volokh (mail) (www):
Aha, I was just going to say -- before reading the last sentence -- that there's a lot of stuff on point in Alesina and Spolaore's book. I haven't read the current version, but I did read the draft in around 2001 when I was in Alesina and Shleifer's course on political economics. I recall there's theoretical stuff in there that I disagreed with, and otherwise I don't remember whether I agreed with it on balance.
8.28.2008 11:47pm
Paul Milligan (mail):
12. I checked.
8.28.2008 11:47pm
Bill Poser (mail) (www):
Thanks for the tip. That looks like a very interesting book. And cheap, too.
8.28.2008 11:49pm
John Steele (mail):
As a former geography major, I recall being told that there are two perfect social sizes. First is the 100-150 population size, which seems to be about the maximum size of a cohesive hunter-gather tribe. Hence that size was a crucible of our environmental and genetic adaptation.

Second, France. Seriously. That's what I recall being told. France, being a hexagon, approximates a circle, which makes for a compact nation. (That is, its vulnerable borders are minimized -- although someone must have forgotten to tell the English and the Germans.) It is large enough to provide plenty of agricultural resources and has access to the sea. Yet it is small enough to inhibit internecine war. It may lack some energy resources and its capital isn't quite centered but, all in all, "l'hexagon" is the ideal.
8.29.2008 12:02am
MarkField (mail):
I think Federalist 10 had something to say about this.
8.29.2008 12:29am
Cornellian (mail):
So why not Britain then? It's roughly the same size as France, has all the same geographical advantages and it doesn't have the disadvantage of a land border with Germany (or any other country). Yet while it's an island, it's not remote - it's quite close to a lot of other countries. The only real downside compared to France is its shape is a bit less compact.
8.29.2008 12:30am
SATA_Interface:
As regards that tribal size, it has been said that a human can maintain up to about 120-140 complex individual relationships with other people, before you start to lose detail and begin grouping individuals in order to maintain familiarity.
8.29.2008 12:36am
Soronel Haetir (mail):
I am somewhat surprised that 100-150 would be a good number for (footbound) hunter-gatherers. I would have put it more in the neighborhood of 30-50 post-adolescents.

I could see larger winter camps of more than one band, but for most of the year smaller groups would seem preferable.
8.29.2008 12:39am
John Steele (mail):
First, IIRC, Britain's history and non-compact shape facilitated division (Scots, Welsh, etc.), and it's northern location make it's agriculture less robust than France's. Second, 100-150 was (I was told) the max, not the typical. Third, I look back on all that with tongue-in-cheek amusement, as those were the same profs who were predicting the imminent demise of capitalism and ascendancy of Soviet socialism.
8.29.2008 12:57am
John Steele (mail):
by "it's," i meant "its"
8.29.2008 12:59am
cirby (mail):
The size limit of a country is the maximum time it takes for any random person in that country to get a message to any other person in that country.

It's not a "number of people" issue - it's a "how fast can you communicate?" issue. A very small country with slow communications is less effective than a very large country with fast communications.

How long would it take J. Random Citizen to get a message to the US President, if they REALLY had to? Or (in England) to the Prime Minister? Or the equivalent posts in Russia or China or Iran?
8.29.2008 1:00am
Soronel Haetir (mail):
Note that my 30-50 is a rough best guess for footbound HG. I could see 100-150 being quite reasonable for a group with the mobility that horses would allow.
8.29.2008 1:04am
David Warner:
"I would have put it more in the neighborhood of 30-50 post-adolescents."

That would be my guess too. So somewhere between that and 7 billion, one country alone likely being bad. The constitution of the polity would seem to be a primary factor, with more liberal polities being perhaps better suited to larger sizes, as they're better positioned to reap the benefits of diversity than more repressive polities.

"those were the same profs who were predicting the imminent demise of capitalism and ascendancy of Soviet socialism."

Were there profs who weren't? I'm kidding, though not as much as I wish I were.
8.29.2008 1:08am
brooks (mail):
"I would have put it more in the neighborhood of 30-50 post-adolescents."

See: http://en.wikipedia.org/wiki/Dunbar%27s_number

And note that that's a ~150 that we can manage to relate to, person-to-person, so it's not necessarily the number that you're going to run into every day. Traditionally, humans, chimps, etc., have fission-fusion societies, with small bands (as both of you mention) being the everyday norm.
8.29.2008 1:36am
Soronel Haetir (mail):
I'm not thinking in terms of communications support, I'm thinking in terms of raw hunting/gathering power. A community of 100-150 is going to require significatly more food than 30-50 people. If those people are on foot they are going to lose even more time to walking as they deplete local resources.

I do see the number of personal connections as being important in building ties between bands to form dispersed tribes, however I'm not sure that enough inter-band trust could exist under harsh conditions for that to spread very far. (Note I'm thinking ice age type conditions rather than the much more temperate modern period)
8.29.2008 1:44am
cirby (mail):

I'm not thinking in terms of communications support, I'm thinking in terms of raw hunting/gathering power.


But that power is directly related to communications time.

When a hunter/gatherer culture gets too large, they have to spread out over a much larger area - miles in extent, in most cases. So when Grog needs to find Urgh, he has to run around for the best part of a day, asking if anyone has seen him (while neglecting his hunting duties).

On the other hand, if someone finds a ticking nuclear weapon in his back yard in Cleveland, there's a really good chance that the occupant of 1600 Pennsylvania Avenue will hear about it in less than an hour...
8.29.2008 2:11am
Big E:
This is just the kind of thing I'm interested in, thanks for the link to the book.
8.29.2008 8:30am
justaguy (mail):
Wouldn't the optimal size be related to technology and the culture? Limited means of communication and ability to form associations in one technology (maybe 18th century?) would lead to one result while web 2.0, email, Youtube and the ability to communicate and find groups in a culture that is open might be another. Add a different culture- one that is not as open- less trust with a higher need of sameness for cohesion and one would get another. So IT DEPENDS- what answer to do want?
8.29.2008 10:36am
Opher Banarie (mail) (www):
I'm not sure about optimal size, but today's Quote Of The Day seems appropriate:

Whenever you have an efficient government you have a dictatorship.
Harry S Truman,
Lecture at Columbia University, 28 Apr. 1959
33rd president of US (1884 - 1972)
8.29.2008 1:02pm
TGGP (mail) (www):
We have multinational corporations. They can achieve economies of scale crossing over political lines of demarcation. These private organizations are what actually provide benefits. A larger government merely has more power over its subjects. The ideal size of a political jurisdiction is one individual. That would be TRUE self-government.
8.29.2008 10:55pm
Aleks:
Spain would seem to fit the bill as well as France. Its roughly the same size and shape (OK, a bit more square than hexagonal) and has excellent ocean access. It has one weaker country to its west and its border with its stronger neighbor to the north is defended by mountains. The Moorish conquest in the early Middle Ages was an aberration made possible by the demographic collapse of the late the 6th century and the weak and divided state in which the survivors found themselves.
9.1.2008 11:10am

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