Several Influencing Factors On The Size Of Nations

The question discussed in this paper is the influence of the degree ofdemocracy, international conflict probability and trade freedom on the size ofnations. From a new political economy perspective, using mathematicalmodel, and checking the conclusion in the history after the Second WorldWar.According the Hotelling model, I normalize the world to a line from0to1, and build utility function of people and payment function of thegovernment. The benefit of size is lower per capita costs of public goods andincreasing productivity and the costs of sizes is diverse preference of people.The equilibrium nation size is trade-off.Putting the three influence factors into the model, we will find: size ofnations has a negative relation with the degree of democracy, a positiverelation with international conflict probability and negative relation withtrade freedom. This conclusion coincides with the history after the SecondWorld War: the degree of democracy increases due to the wave ofdemocratization; the setup of union, WTO and GATT provides channel fordealing with international economy problems peacefully and contributesmuch in reducing tariff and trade barrier, making lower international conflictprobability and higher trade freedom.Through analyzing the fact that USA maintains the super country afterthe Second World War till now, we find it’s not exception of our paper. Thereason is the federalism of USA.