November 26, 2020

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Catalan nationalism welcomed that formulation. In the many academic works favorable to the independence postulates it is easy to find the same authority quote (“as shown by Harvard University professor Alberto Alesina…”) to support the rationality of the movement. What's more, the Generalitat translated the book in 2008 and in the foreword of the then councilor of Innovation, who was a member of the ERC in the José Montilla tripartite, it is stated bluntly that small countries are more democratic and competitive. A rather forced conclusion that does not derive from the research and that the author, despite being asked about it in full development of the procés, never endorsed it. Furthermore, unfavorable results are obtained for secession supporters when the three main elements that make up his theory are contrasted with the Catalan case: (1) the historical benefits of the size of the countries, (2) the definition of heterogeneity of a society and (3) the importance of joining the EU.

Ignacio Molina

1/06/2020

Just over a week ago, Alberto Alesina, a brilliant professor at Harvard University and a recurring candidate for the Nobel Prize in Economics, died prematurely. As is often the case with good European scholars in the United States, he liked to challenge his audiences on both sides of the Atlantic by preaching on each shore the virtues of the other. If in America he recommended welfare policies against the pernicious effects of poverty and racism, in Europe (especially in his native Italy) he stressed the need to increase productivity and clamp public spending. His controversial idea of “expansive austerity” in heavily indebted countries, which he himself presented at a meeting of Ecofin ministers held in Madrid in 2010 and which was applied with more pain than glory in rescues to the periphery of the Eurozone, caused him strong attacks. It is true that Alesina was radical in some of his approaches but, unlike his most famous critics, he never fell into the error of predicting or wishing for the failure of the common currency. He was a pro-European of reason and will.

I met him in 1998, at the Harvard Center for European Studies of which he was a member and I was a young visiting researcher. His charisma was extraordinary and, at that time, at just over 40 years old, he stood out as a prolific author. He had just published a highly commented article among Spanish predoctoral students at the time; singularly in the group of Catalan historians, political scientists and economists: On the Number and Size of Nations.

In this work, later turned into a monography with Enrico Spolaore, he articulates a very interesting thesis on the contingent nature of borders and the inverse relationship between the benefits of economies of scale and the costs of providing public goods in heterogeneous societies. . The empirical argument is that the number of countries increases as globalization grows because the prosperity of a territory depends less and less on belonging to a national market of a certain size. The resulting prediction, in a European context, is that the largest and most heterogeneous states will have trouble staying united as certain regions will find it preferable to separate and, while maintaining their economic viability as new members of the EU, to achieve an internal governance more attuned to the preferences of its population.

Catalan nationalism welcomed that formulation. In the many academic works favorable to the independence postulates it is easy to find the same authority quote (“as shown by Harvard University professor Alberto Alesina…”) to support the rationality of the movement. What’s more, the Generalitat translated the book in 2008 and in the foreword of the then councilor of Innovation, who was a member of the ERC in the José Montilla tripartite, it is stated bluntly that small countries are more democratic and competitive. A rather forced conclusion that does not derive from the research and that the author, despite being asked about it in full development of the procés, never endorsed it. Furthermore, unfavorable results are obtained for secession supporters when the three main elements that make up his theory are contrasted with the Catalan case: (1) the historical benefits of the size of the countries, (2) the definition of heterogeneity of a society and (3) the importance of joining the EU.

Much has been written about the last of these factors, and I myself have reflected in the past: it is true that European integration reduces the diseconomies of scale inherent in being small in such an interdependent world but, to the extent that accession is subject to a very complex enlargement process (in which the current national capitals have the right of veto), the encouraging effect that the existence of the Internal Market would have in trying to break the EU member states quickly and paradoxically becomes one of  its main brakes.

The second element is also not so pleasant for independence when it goes from the muses to the Catalan theater. Being small can reduce governance costs if the heterogeneity of population preferences is low, but it is not always achieved. In societies with identity fragmentation, even the opposite occurs. For example, Northern Ireland is more difficult to govern than the current United Kingdom or a hypothetical unified Ireland. If heterogeneity is equivalent to a complex national reality, then a Catalan state in which such a large proportion of its population feels Spanish would have, at scale, a more conflictive provision of public goods than that of current Spain, where the minority is the one having an alternative national identification and there is territorial self-government to attend to differential events. On the other hand, Alesina himself published in 2017 another piece on European cultural and institutional homogeneity (which, it must be said, has a very problematic methodology) where he concludes that the dominant values on the Castilian plateau are more Europeanized than those of Catalonia. This work has not been translated by the Generalitat.

But it is the first point of The Size of Nations that may be more adverse for those who argue that Catalonia has done and does poorly in Spain. The argument of the book is that, although now the value of belonging to a large nation would be diminishing, it would have been very valuable to be part (at least since 1714) of a unitary State. In fact, a contrast between today’s Catalan demographic and economic reality with its environment and with European countries with between two and 10 million inhabitants, projects a hypothetical Catalan State with much less GDP, just over half of the current population and a capital similar in importance to Dublin, Helsinki or Zagreb.

It is obvious that Barcelona is much more than that. As the second city in Spain (and, in many areas, the first), it has grown to become a formidable global and bilingual city that has historically known how to take advantage of its location in an important national market and its proximity to suppliers and customers in the rest of Europe (or Latin America). And so, Catalonia is today the territory with the highest purchasing power in the entire Mediterranean, with the exception of the tiny principality of Monaco or 300 kilometers of Adriatic coast in the richest area of another large State: Italy.

A historical alternative would have been to belong to France (as it could have happened since 1640 or after the Napoleonic conquest), but it is plausible that Catalan welfare was then inferior since, as it happens to Roussillon, we would be talking about departments far from the axes of industrialization near Paris or on the back of the so-called Blue Banana. Of course, in addition, its own language would be entirely subordinate to French. Certainly, in the improbable case that throughout history it had managed to disconnect from its two great neighbors, Catalonia would be a monolingual and homogeneous State in the terms of Alesina and Spolaore but, apart from the fact that its ‘per capita’ income would hardly equal the one it enjoys today, there would be no city of wonders, no 1992 Olympics, and its first football club would compete with FC Copenhagen or any powerful team in the Slovak league.

Indeed, size matters. But if Catalan nationalism has made a hasty and incomplete reading of this thesis, it seems equally appropriate that Spanish nationalism draw the appropriate conclusions. It may not have been bad for Catalonia to be part of Spain and that the deep division of preferences among the Catalans themselves or the infeasibility of the strategy of internal enlargement of the EU would make a rupture impossible in the next 50 years. However, it would be a delayed suicide to pretend that Spain enjoys an internal homogeneity that is not such or to ignore the legitimate fears of linguistic and cultural assimilation that, in Alesina’s work, are identified as the greatest fuel for secession. As our honored economist said, a decentralization that knows how to recognize the costs of heterogeneity and accommodate the distance between the preferences of the majority and identity minorities when providing public goods is the best substitute for the number of states to continue multiplying themselves . Managing diversity at different scales (Catalan, Spanish and European) is indeed a challenge. A large size one.

http://agendapublica.elpais.com/alberto-alesina-y-el-tamano-de-las-naciones/

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