This paper studies the equilibrium determination of the number of countries in different political regimes, and in different economic environments, with more or less economic integration. The authors focus on the trade-off between the benefits of large jurisdictions and the costs of heterogeneity of large and diverse populations. Their model implies that (1) democratization leads to secessions; (2) in equilibrium one generally observes an inefficiently large number of countries; and (3) the equilibrium number of countries is increasing in the amount of economic integration. Copyright 1997, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
