This paper studies the equilibrium size of countries. Individuals in smallcountries have greater influence over the nature of political decision mak-ing while individuals in large countries have the advantage of more publicgoods and lower tax rates. The model implies that (i) there exists...

After decades of government growth, Western countries have witnessed major policy reversals. Prominent examples include the far-reaching policy reversals implemented by Thatcher, Reagan, and Douglas. This paper offers an explanation for these policy reversals. Our key argument rests on the...