When the Soviet Union fell, why did the region break up into smaller independent states, rather than remain one nation? In contrast, at almost the same time, what caused 15 European nations to band together to create a supranational institution with a common currency, rather than maintain their completely separate sovereignty? Are small countries more viable than large countries? Are dictatorships bigger than democracies? And within countries, why are capital cities usually centrally located?

One would think these questions too diverse to be answered with one simple paradigm. But in an extraordinarily innovative and provocative book, Alberto Alesina and Enrico Spolaore provide a brilliant yet parsimonious model, capable of cogently addressing all these questions. In a nutshell, they simply examine what factors influence the size of nations. But in answering that one question about nation size, the authors are able to answer each of the above questions, and many more about the viability of nations. They do so in 13 chapters. The first two provide the theory, the next seven (Chapters 3-9) apply the theory to various situations, the next several (Chapters 10-12) test implications of the theory, and the final chapter (Chapter 13) recapitulates, carefully pointing out qualifications and needed future work.

Of the chapters applying the theory, Chapter 3 considers democratic countries, Chapter 4 analyzes tax and transfer payment policies, Chapter 5 examines dictatorships, Chapter 6 introduces trade among nations, Chapters 7 and 8 explore international conflict, and Chapter 9 takes on decentralization of government services. Of the chapters testing the theory, Chapter 10 adopts statistical methods, Chapter 11 utilizes a historical approach, and Chapter 12 adopts a case study concerning current European integration. All chapters are well written and easy to follow. Many have mathematical models, but the mathematics is separated, making it easy for the less technically inclined reader to skip without any real loss in understanding.

The authors' basic approach is simple. They define nations as powerful entities capable of taking legal actions within their own borders to ensure well-being for their citizens and leaders. One legal action is taxation, which raises revenues for such public goods as defense, highways, and schools, all of which a nation provides its citizens. Larger countries permit economies of scale, and so per citizen costs for public goods diminish (much as the per mile costs of passenger air travel diminishes as airplane size increases). But by becoming large, a nation grows more heterogeneous, making the country more difficult to manage. These bigger populations imply diversity; however, diversity complicates how leaders allocate tax dollars because a wide-ranging citizenry often has conflicting interests. The trade-off between these two, that is, scale and heterogeneity, determines any particular nation's size. Nations gravitate toward an optimal size by being big enough to take advantage of scale, but small enough not to have too much diversity. Any factor that alters this trade-off influences a nation's size. In this context, the book examines myriad factors, for example, form of government (Chapters 3 and 5), international trade (Chapter 6), and conflict (Chapters 7 and 8), that affect this trade-off. The book also explores how this trade-off evolved throughout history (Chapter 11).

Some might think it irrelevant to model a nation's optimal size since nations do not change size very quickly. However, even though nations do not change size annually, they can and do change size over longer time periods. Alesina and Spolaore give numerous historical examples and point out that in 1945, there were 74 independent countries with an average landmass of 201 million square kilometers, whereas today we have 193 countries with an average size of 77 million square kilometers.

Begin with the basics. Given earth's constant landmass, the larger the number of nations, the smaller the size of each nation. Thus, a world divided into a greater number of nations means that on average, each nation is smaller in size. Accordingly, size of nations and the number of nations are intertwined. For this reason, the authors derive theorems regarding number, but these theorems have implications concerning size.

If one assumes that citizens benefit from being close to the seat of government, then their benefits from public goods diminishes the farther they reside from the capital. (This is why the authors argue that capital cities tend to be centrally located.) Given their assumption of an evenly distributed population, a larger population necessarily implies a greater number of citizens farther from the capital. These citizens gain less from government. As such, they have a greater tendency to secede to form a new nation. Citizens in democratic regimes have more voice than citizens in dictatorships. Thus, all else being constant, democratic freedoms empower peripheral citizens to form new nations. In turn, more nations imply smaller sized countries. From this logic, the authors predict democracies to be smaller than dictatorships, which is consistent with the formation of 15 countries following the Soviet Union's fall. This logic also explains the expansion of the Ottoman Empire in the fifteenth and sixteenth centuries, the growth of France in the sixteenth and seventeenth centuries, and the conquests of Germany after World War I.

World trade also affects country size. Consider a world with no trade. This means all nations must be self-sufficient. But to be self-sufficient, a country needs to be diverse enough to supply all citizen needs. Small nations are at a disadvantage because they simply do not have the scale to provide everything. To overcome this inadequacy, they must grow. By the same token, free trade enables countries to value heterogeneity over scale, since through trade they can purchase what they cannot produce domestically. As such, nations will be smaller and exploit comparative advantages to obtain goods not produced at home. Thus, free trade eras should lead to smaller countries than periods of trade restrictions. According to Alesina and Spolaore, this principle explains why “the city-states of Italy and Northern Europe [between the fourteenth and seventeenth centuries] prospered because of sea trade” (p. 219). Similarly, they argue that “the trend towards economic integration and political separatism over the last fifty years has resulted in the number of independent countries almost tripling” (p. 219).

The authors' approach reinforces the current literature on trade and conflict. In that literature, trade leads to a diminution of conflict. They argue that increases in trade leads to smaller countries. But since smaller nations spend less on defense, conflict is likely to fall. Worldwide belligerence also affects country size. As they state, “the size of countries is influenced by the need for governments to protect [their] citizens in an unfriendly world” (p. 95). But we already know that economies of scale mean that bigger countries are more efficient at providing public goods. Given that defense is one such public good, large countries are at an advantage in a bellicose world. Conversely, the authors argue that when world tensions eased, such as following the Cold War, separatism exploded, leading to the creation of new states.

I wish I could find some substantial fault with the book, but except for a few minor typos and perhaps a cursory empirical analysis, I cannot. The Size of Nations is a brilliantly crafted piece of work. Although some might find the implications regarding how polity, trade, and worldwide belligerence affect nation size obvious, I do not because each of the implications is derived from a powerful overriding theory. This is an especially crucial read for political scientists since it illustrates how a very parsimonious model can lead to strong predictions, reasonably upheld by data. The book ranks among the best I have read in my career. I recommend it highly.