DP5350 Size Really Doesn't Matter: In Search of a National Scale Effect

Author(s): Andrew K Rose
Publication Date: November 2005
Keyword(s): big, country, cross-section, data, empirical, international, panel, population
JEL(s): O57
Programme Areas: International Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=5350

I search for a 'scale' effect in countries. I use a panel data set that includes 200 countries over forty years and link the population of a country to a host of economic and social phenomena. Using both graphical and statistical techniques, I search for an impact of size on the level of income, inflation, material well-being, health, education, the quality of a country's institutions, heterogeneity, and a number of different international indices and rankings. I have little success; small countries are more open to international trade than large countries, but are not systematically different otherwise.