Incentives for secession in the presence of mobile ethnic groups

This paper presents a model on secessions and nationalism, with special emphasis on the role of imperfectly mobile ethnic minorities. Individuals trade off political benefits of homogeneity against economic costs from increasing returns to scale in production. The main findings are: (i) Mobility decreases the political motivation for independence, because increased competition for labour forces the ethnic majorities in the separating countries to accommodate their policy. (ii) The impact of mobility depends on whether separation is politically or economically motivated. (iii) Increased mobility leads to a less accommodated policy in case of no separation.