Weekend Economists Trace the Long and Winding Road February 7-9, 2014

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42. Should Scotland Become Independent?

http://www.slate.com/blogs/moneybox/2014/02/07/scottish_independence_is_small_beautiful.html

Scotland's independence referendum later this year hasn't gotten much coverage in the United States and most of the coverage I have seen has largely reflected the international community's knee-jerk hostility to the redrawing of borders.

But I have to say that my priors go in the other direction, and I'm favorably disposed. The main reason is that it seems to me that in the European context where everyone is a stable democracy with a mixed-market economy, the small countries (Netherlands, Denmark, Finland, etc.) are generally a lot better run than the bigger ones. For one thing, smaller countries have simpler institutional arrangements since you're not trying to accommodate size by embedding complicated federalism mechanisms into the already complicated framework of the European Union. But for another thing, I think the debate over welfare state design gets more sensible when you're talking about a small jurisdiction. A place like Scotland is a sufficiently small share of the United Kingdom that it makes sense for a Scottish political activist to be more focused on "how much money does this program bring to Scotland?" than on "how good is this program at generating social benefits in a cost-effective way?" An independent Scotland—like an independent Wallonia or other possible new European mini-states—would have politics that I think would ultimately be more constructive.
Of course maybe not. Don't mistake this for a thorough investigation of the ins-and-outs of independence for Scotland.

But if you think about the larger context of the "European Project" then I think it really does make sense to become more favorable to European independence movements in general. Creating a continent-wide zone of peace and market integration was enormously hard work. One of the major benefits of that work is to create an international landscape that's much friendlier to the interests of small nations. The kind of place where Belgium doesn't get trampled simply because it's sitting on the optimal invasion route into France. That people in Scotland and Catalonia and Flanders and elsewhere are pushing to take advantage of those gains seems very sensible to me.