Happy Birthday, Montenegro
If all goes according to plan, Montenegro will soon separate from the state of Serbia and Montenegro and become a sovereign state. With this act, Montenegro will become the 193rd or 194th or 195th state, depending on how one defines a state. For more precision, we can say that Montenegro will be the 192nd member of the United Nations when it takes its seat. (Taiwan is a state but is not formally recognized as such, and is not a member of the United Nations; there are a few other ambiguous cases.)
As a recent post by Saul Levmore noted, the number of states has increased rapidly since World War Two. The graph below provides some data.
Most of the increase can be attributed to decolonization of large areas of Africa and Asia, the breakup of the Soviet Union, and the breakup of Yugoslavia. Also important are the division of Czechoslovakia into the Czech and Slovak republics (1993), the secession of Eritrea from Ethiopia (1993), and the secession of East Timor from Indonesia (2002). In the opposite direction, many European states are partially merging into the EU, but this seems to be a localized and special situation. Prior to World War II, the number of states increased with the collapse of the Ottoman, Russian, German, and Austro-Hungarian empires at the end of World War I. Prior to World War I, the trend was in the other direction. The number of states declined in the nineteenth century when German states merged to form Germany and Italian states merged to form Italy.
The unreflective response to these developments is one of approval. Observers living elsewhere instinctively think that when a group of people want to secede and start a new nation state, they should be permitted to do so. But this instinct is probably not right. The first and obvious point is that 45 percent of the population of Montenegro voted against independence. Should these 45 percent be permitted to declare independence as well? People living in the Serbian region of Serbia and Montenegro could not vote on whether their country would be divided, though they would obviously be affected by the division, and don’t seem too happy about it. There is no obvious or simple criterion for determining the optimal size, shape, or location of a state, and who should decide.
What explains the trend toward more and smaller states? The economists Alberto Alesina and Enrico Spolaore argue that greater trade openness since World War Two is the cause of the increasing number of states. As trade barriers decline, the gains from having a large internal market fall; the populations of small states can exploit economies from the division of labor as well as the populations of large states can. Alesina and Spolaore also suggest that democratization may play a role in the increasing number of states. Dictators may prefer large states so that they have a larger population to exploit; democracies rely to a much greater degree on popular consent. But trade openness and the type of political regime are themselves the result of choices by governments of powerful states such as the U.S., which has pressured other states to reduce trade barriers and adopt democratic forms. One wonders whether the U.S. and its allies have been pursuing policies that made sense in the short term but in the long term will result in political fragmentation that will make the world harder to manage.
To see why this might be a problem, imagine some global collective action problem—overexploitation of a fishery, the spread of infectious diseases across borders, smuggling of drugs and weapons, the collapse of states which become refuges for terrorists. Surely such problems can be handled more effective by a small number of states than a large number of states. As states shrink, spillovers increase, decisonmakers multiply, and thus global collective action becomes more difficult. Separatist movements in Spain, Italy, Canada, Russia, Serbia, Mexico, and many other places, will draw inspiration from Montenegro’s success. It’s not clear that the rest of the world can do anything about this, but on the margin it may be better for it to be discouraging rather than encouraging.