Optimal secession rules

Massimo Bordignon, Sandro Brusco

Risultato della ricerca: Contributo in rivistaArticolo in rivista

35 Citazioni (Scopus)

Abstract

Should the constitution of a federation allow for peaceful secession? Constitutionally defined secession rules are optimal ex post if the federation breaks down. However, they may be suboptimal ex ante if the member countries receive a benefit from the perceived long-term stability of the federation and constitutionally defined secession rules increase the probability of a break-up. The optimal social contract trades off ex ante benefits and ex post losses, and it may avoid explicit secession rules. If transfers are costly, the trade-off is present even if ex post renegotiation is allowed. Finally, we show that under asymmetric information it is more difficult to keep the federation together and that a secession war may occur.
Lingua originaleEnglish
pagine (da-a)1811-1834
Numero di pagine24
RivistaEuropean Economic Review
DOI
Stato di pubblicazionePubblicato - 2001

Keywords

  • NATIONS
  • integration

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