This paper studies the relationship between international con‡ict and the size distribution of countries in a model in which both peaceful bargain-ing and non-peaceful confrontations are possible. We show how the size distribution of countries depends on the likelihood, benefits and costs of...

Normally, economists take the size of countries as an exogenous variable which does need to be explained. Nevertheless, the borders of countries and therefore their size change, partially in response to economic factors such as the pattern of international trade. Conversely, the size of...