Voting, Public Goods and Violence

Abstract

Borders are not definite, they can change over time. Recent examples are the disintegration of the Soviet Union and of the Socialist Republic of Yugoslavia. Within countries, borders between municipalities can change as well. Border changes can be relatively peaceful, like it was the case in Czechoslovakia, but they can also go together with violence, like it was the case with Eastern Timor. This book contains a study of the incentives individuals have to form jurisdictions, using throughout a microeconomic approach. Consecutively, the roles of public good provision, of intergovernmental transfers and of violence are discussed. The analysis argues that individuals have incentives to form jurisdictions that are smaller than optimal from a social welfare point of view, but that intergovernmental transfers can alleviate this. The discussion on violence sheds some light on the incentives for the use of violence and how this affects political outcomes.