War, Peace and the Size of Countries

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 conflict and war. We also study the role of international law and show how better defined international ’property rights’ may lead to country breakup and more numerous local conflicts.