The Incredible Shrinking State: Explaining Change in the Territorial Size of Nations.

We examine the effects of economies of scale in government, trade openness, preference heterogeneity, transactions costs, regime type, and world culture on the territorial size of states. No one variable appears to explain the trend fully. Our tentative conclusion is that the rise in state size during the 19th century is the product of a growing number of federal democracies, which tend to be large, and the decline in average size during the 20th century, in turn, is produced by the increased number of unitary democracies, which tend to be small. This "uncaused cause," however, begs for further investigation. We speculate that increasing economies of scale in the 19th century and the success of the "American model" led to the rise of large federal democracies, while economic liberalism and diffusing norms of political freedom allowed unitary democracies to prosper in the 20th century. [ABSTRACT FROM AUTHOR]