Sasha Petrov

National border configurations significantly affect welfare: they govern trading opportunities and eligibility for public services. Empirical evidence suggests that postcolonial border design has harmed African long-term development through these two channels. This paper offers a spatial model of borders that evaluates welfare consequences through trade and public goods provision. This model features four key forces: the benefits of economic and fiscal integration, the costs of preference heterogeneity, and span of control. To evaluate the inefficiencies of border configurations, I set up an optimal borders problem to balance the trade-off between these forces and develop a strategy to make it tractable. I calibrate the parameters and fundamentals of the spatial model and use the proposed method to solve the optimal borders problem in the African context. With optimal borders, Africa could gain at least 28% in welfare. The primary shortcoming of current borders is their geographic position, not the number of countries.