Essays on political boundaries

In the first chapter of this thesis, I study Japanese municipal mergers using a political coalition formation model. Political coalition formation games can describe the formation and dissolution of nations, as well as the creation of coalition governments, the establishment of political parties, and other similar phenomena. These games have been studied from a theoretical perspective, but the models have not been used extensively in empirical work. This paper presents a method of estimating political coalition formation models with many-player coalitions, and then applies this method to the recent heisei municipal amalgamations in Japan to estimate structural coefficients that describe the behaviour of municipalities. The method enables counterfactual analysis, which in the Japanese case shows that the national government could increase welfare via a counter-intuitive policy involving transfers to richer municipalities conditional on their participation in a merger. In the second chapter, I examine selection effects in the cross-country state system. The countries present today are only part of a larger set of potential countries. Since many modern states originated as colonies, colonial data can be used to examine correlates of independence. During decolonization, larger and more economically successful colonies were more likely to become independent. This selection effect may explain why, despite commonly held opinions about efficiencies of scale, small countries appear to have higher GDP both in terms of growth and levels. The estimated selection model implies that analysing only currently independent countries can introduce substantial selection bias.

Department dc:contributor.department

Massachusetts Institute of Technology. Dept. of Economics.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2009

Author dc:creator

• Weese, Eric Gordon

Advisor dc:contributor.advisor

• Daron Acemoglu and Abhijit Banerjee.

• Economics.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/49712

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/49712