Natural Disasters, Ethnic Diversity, and the Size of Nations: Two Thousand Years of Unification and Division in Historical China

The size of nations matters, but the literature on the subject is long on theory and short on direct econometric testing. Using a unique time series data set spanning the past two millennia, we study the process of unification and division in historical China. The empirical results are consistent with the theory on the size and number of nations. First, frequent famines reduced the number of nations in China because a larger nation could more efficiently ensure the provision of public goods as the cost of such public goods (e.g., disaster relief) rose. Second,increased ethnic diversity was associated with an increased number of nations because smaller nations could better serve a heterogeneous population. Using both annual and decadal data, these results survive a variety of robustness checks after controlling for nomadic attacks and a rich set of climate variables.