Economic integration and political fragmentation

Abstract

The purpose of this article is to provide an economic analysis of the relationship between economic integration and political fragmentation. This follows previous contributions from Alesina et al (2000), Casella (2001, Casella and Feinstein (2002), or Leite-Monteiro and Sato (2003). We go a step further than these authors by assuming that economic integration and political fragmentation are both decided by a majority vote. As them, we observe that economic integration involves political fragmentation. But, we establish also that economic integration might be sometimes deterred by the majority to prevent political fragmentation from happening.