The Size of Nations

Rating:
Summary: Stimulating, but centrally flawed.
Review: The book raises two interesting questions and attempts to answer them; What determines the size of nations, and what effect country size has on economic success? The discussions that follow are thought provoking and I recommend the book to anyone that finds the questions fascinating.
The central flaw is one that comes up early and has far too much influence in subsequent chapters. A principle assumption is that public services are localized and that the further the distance from the those services, the less benefit a citizen will derive from them. Distance therefore becomes a key factor in determining the populations loyalty to the center. Providing those services, or compensating for the lack of them, is progressively more expensive the further from the center. This may have once been true in earlier, more centralized times when capital cities were lavished with amenities that other cities lacked. The same argument now would imply one of the following:

1) that people living in Washington DC have far better public utilities than those living in Honolulu and the central government gives substantial tax breaks to those living in Hawaii to compensate.

or 2) Honolulu has public amenities comparable to DC, but that the cost to the center to provide it to Hawaii is prohibitive and far outweighs taxes collected in Hawaii.

This book is far more valuable for raising the right questions than for giving the right answers. If the reader can appreciate that, this book is well worth the read.

Rating:
Summary: very stimulating book
Review: This is an original and stimulating book. The authors's main point is that the size of nations is determined by a trade-off between the costs and benefits of size. Among the costs of large countries there is the difficulty of satisfying the preferences of a more diverse population. However, as they point out, some of these preferences can be accommodated through decentralization and federalism. That is the case in the US. I think that the reviewer below here who mentions Washington and Hawaii is not right. Public amenities are as good in Hawaii as in Washington these days because most public goods are chosen locally in the US (if you go to France things are still pretty different). But the real costs of joining the US for the Hawaians was loss of political independence. The original Hawaians had a very distinct language, culture, etc. and they would have chosen very different policies if they had been independent rather than a part of the US. And that, I understand, is the authors' main point: by expanding a country, you may end up with many people who have preferences that are far from the average preferences. That is a very good and general point, although the authors may have overstressed the link geography-preferences in order to get neat mathematical models, as economists always do. My overall impression from reading this fascinating book is that their story holds pretty well and explains a lot of what actually happened - and is still happening - in the real world.