Sasha Petrov

National border configurations significantly affect welfare: they govern trading opportunities and the demographic composition of countries. Empirical evidence suggests that postcolonial border design has harmed Africa's long-term development through these two channels. This paper offers a spatial model of borders that evaluates their welfare consequences through trade and the provision of public goods. This model features four key forces: the benefits of economic and fiscal integration weighed against the costs of preference heterogeneity and span of control. To evaluate the inefficiencies of a given border configuration, I set up an optimal borders problem balancing the trade-off between these forces and develop a decomposition method to solve it. After calibrating the parameters of the spatial model and using the proposed decomposition method to solve the optimal borders problem in the African context, I find that Africa could gain at least 28% in welfare with optimal borders. The primary shortcoming of the current borders is their geographic position, not the number of countries.