DP9040 Who Needs the Nation State?

Author(s): Dani Rodrik
Publication Date: July 2012
Keyword(s): Globalization, Nation State
JEL(s): F0, H41
Programme Areas: International Macroeconomics, Public Economics, International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=9040

The design of institutions is shaped by a fundamental trade-off. On the one hand, relationships and heterogeneity push governance down. On the other, the scale and scope benefits of market integration push governance up. A corner solution is rarely optimal. An intermediate outcome, a world divided into diverse polities, is the best that we can do.