Rothbard’s 1994 article ‘Nations by Consent: Decomposing the Nation-State’ distinguishes sharply between the state, as a political entity, and the nation, a ‘complex and varying constellation of different forms of communities, languages, ethnic groups, or religions.’ Rothbard develops a theory of natural national boundaries, based on the principle of volunary association and the empirical claim that people tend to associate with particular familial, linguistic, cultural, and religious, groups. ’One goal for libertarians should be to transform existing nation-states into national entities whose boundaries could be called just, in the same sense that private property boundaries are just; that is, to decompose existing coercive nation-states into genuine nations, or nations by consent.’
A March 2006 working paper by Alberto Alesina, William Easterly, and Janina Matuszeski, ‘Artificial States,’ proposes several measures of the degree to which state boundaries are ‘natural’ – corresponding roughly to Rothbard's nations – or ‘artificial.’ One measure identifies state borders that split ethnic groups into separate states, while another uses fractal geometry to characterize borders as straight or squiggly, assuming that straight borders are more likely to be articifially drawn and not corresponding to natural geographic or ethnic boundaries. The authors show that their measures are closely correlated with the usual measures of national economic performance (the more natural, the better).
A longer version of this post appears at Organizations and Markets.