The economics of secession: a review of legal, theoretical, and empirical aspects

Economic theory shows that the decision for a region to remain in a country (or a union) or to secede results from a trade-off between the benefits of being part of a large country, and the costs  associated with more heterogeneity. Literature confirms the importance of these trade-offs and shows that decentralization may be effective to accommodate secessionist conflicts only if certain conditions are fulfilled.