207. Scale advantages of political integration
Scale effects entail that efficiency is greater at
higher volumes of activity. The following types have been identified[ii]
First, specialization.
This goes back to Adam Smith. Larger volumes of production allow for
division of labour, and the resulting specialization in component activities
increases efficiency. In political integration this means that there can be
specialization within bureaucracy, public services and government departments.
Second, the periphery/surface
effect. For a circle the ratio between circumference and surface is 2/r,
where r is the radius of the circle. In politics, the periphery carries costs
of frontier policing and defence, while the surface yields resources available
in the country. Thus the ratio between costs and resources declines with size.
Third, spread of
risk. In a larger territory the incidence of calamities, such as earth
quakes, floods, hurricanes, etc. is spread over a larger territory, yielding
more remedial resources per incidence.
Fourth, incidence
of excellence. At a given chance of excellence occurring anywhere, the
chance that it occurs in a larger population is larger than in a small one.
Fifth, Threshold
effects. Many services carry the ‘threshold cost’ of the minimum capacity needed
for the service to function. An example is a service desk, with the minimum of
one attendant. At a low volume of use the cost per user then is higher than
with a large volume of users. This applies to all manner of government services.
Also to foreign diplomatic representation and negotiation, for example. Also to
other basic, minimal capacities, for basic research, security and surveillance,
communication, elections, … Mostly, the cost of those carries a fixed, minimal
component and a component related to the volume of use. The efficiency of size
lies in the first. In some cases, such as law making, the fixed, minimum costs
far outweigh costs in relation to size.
How about an air force? One needs a lager one for a
larger surface of the territory, so that it does not fall under the
periphery/surface effect, but there are threshold costs in setting up and
maintaining an air force of any size.
Sixth, as noted by Gary Marks, public goods are non-rival, i.e. use by one citizen does
not reduce the availability to others. For example, a law does not diminish in
its application. However, with an increasing population the costs of
administering the law do increase.
Seventh, variety. The variety of larger territories is larger, in culture, knowledge, experience, conditions, and greater variety yields a greater fund for the ‘novel combinations’ of innovation.
However, this is a double-edged sword, since greater variety
also makes cooperation and unification more difficult.
Earlier in this blog I discussed the notion of ‘cognitive
distance’. The larger it is the more potential there is for learning and
novelty, but the more difficult it also is to bridge that distance in order to
utilize the potential.
And there is the problem of parochial altruism. I
discuss that in the next item.
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