Does National Size Matter?


A new book from MIT Press (The Size of Nations by Alberto Alesina and Enrico Spolaore) explores a question as old Aristotle: what is the ideal size of a nation? Consider this: of the ten most prosperous nation-states (measured by per-capita gross domestic product), six have a population of less than one million people, Singapore has three million, Norway has four million, and Switzerland has seven million. Thus, altogether, nine of these richest nations have a combined population of less than 20 million people. The tenth nation is the true outlier: the USA, with 260+ million people. How is it that America has been able to sustain the kind of economic performance that other large nations have not? Federalism has something to do with it, but I doubt that a relative lack of centralization is the only factor (economic freedom probably looms large as well); I'll have to read the book to get the full story.

Peter Saint-Andre > Journal