Persistent States: Lessons for Scottish Devolution and Independence

Main points

• The equilibrium size of a nation state is, in part, the result of a trade-off between the gains from scale economies in the provision of public services and the costs of applying uniform policy to heterogeneous cultural, institutional and geographical fundamentals.
• Changes in such fundamentals can thus place pressure on states to reform over time. We consider this dynamic state formation process in the context of Scotland within the United Kingdom.
• First, we review the recent research in economic history on the persistence and evolution of such fundamentals.
• Second, we consider the history of Scotland both before and after the 1707 Act of Union in the light of that broader economic history literature.
• We conclude with some implications of fundamental persistence for current debates on the place of Scotland within the United Kingdom.