Tag: economics of federalism

Federalism and transitional economies


The Chinese and Russian transitions explained

Epstein on Segregation and Exploitation in the Old South

From https://www.forbes.com/sites/richardepstein/2010/09/06/segregation-and-exploitation-in-the-old-south/#504ebeaf7380

@EricCrampton @KhyaatiA should New Zealand divide into Cantons?

Suggestions by the New Zealand Initiative for regions to be able to ask to be exempt from some national policies was against a background that New Zealand is too small to be a federal state. The New Zealand provinces were abolished in 1876. Switzerland seems to still put bread in the shops despite having many tiny Cantons and half-Cantons.


Source: Swiss Statistics – Cantons, communes.

So many American states have smaller populations are New Zealand, half in all, that is difficult to present them on a chart. All managed to be richer the New Zealand despite the horrors of federalism or because of it. These small state populations are before considering how much  local government legislative power there is, including taxing and spending powers, city income taxes and city sales taxes, and county and local police forces.


Source: List of U.S. states and territories by population – Wikipedia, the free encyclopedia.

The median national population size of countries is not much more than New Zealand’s current population.

  • Controlling for location, Easterly and Kraay (2002) found that smaller states were richer than other states in per capita real GDP.
  • Rose (2006) reviewed the impact of size on the level of income, inflation, material well-being, health, education, and the quality of a country’s institutions and found that small countries are more open to trade than large countries, but are not systematically different otherwise.

As I argued in my previous post on distance, New Zealand were prosperous from the time of European settlement despite a small population and their great distance from the main markets of the world on each side of the Atlantic.

Of the ten richest countries in terms of GDP per capita, only four have populations above one million people (Alesina 2003). These countries are the USA (290 million people), Switzerland (7 million people), Norway (4 million people) and Singapore (3 million people). Of these four nations, two are below the global national population median of six million (Alesina 2003).

The politics of marijuana in the USA

In representative democracy that is a unitary state such as New Zealand, the issue on marijuana decriminalisation is who will change their vote to vote against a party who advocates marijuana decriminalisation under a MMP system where all elections are close.

In a strong federal state, where some states allow citizen initiated referendums to change the law, it is possible to pioneer reform without that backlash. Then laboratory federalism takes over. Subsequent to the decriminalisation of marijuana or medical marijuana by various state governments, the Congress defunded federal marijuana drug law enforcement in states who had decriminalised marijuana. That major reform was underreported.