The economic impact of secession

The economic consequences of secession – when one region breaks away from another to form an independent state – has gained significant attention in recent years, especially with the rise of pro-independence movements in various parts of the world. Secession debates often focus on the economic consequences for the seceding region (e.g. Brexit, Scotland or Catalonia). But much less attention is given to how secession impacts the successor state. In our recent work published in Regional Studies and entitled "Trading borders: the importance of interregional integration and economy size for the impact of secession", we use an economic model to simulate and assess the economic impact of secession on both seceding and successor regions of independence debates. We focus on international trade. This means that in our framework secession is modelled as an increase in the cost of trade between two newly formed countries that (pre-secession) were part of the same country and single market.