In This Review

The End of the Nation State: The Rise of Regional Economies

The End of the Nation State: The Rise of Regional Economies
By Kenichi Ohmae
199 pp, The Free Press, 1995

This short book puts forward three theses: world markets, including many services, have and will continue to become highly globalized; the modern nation-state has developed too many rigid rules and practices--fiercely defended by special economic interests, including income transfers to poor regions--to cope with rapidly changing international economic circumstances and opportunities; and new "region-states" of 5 to 20 million persons, possibly crossing national boundaries, represent the natural unit of economic growth, enjoying economies of scale in services (e.g., advertising) but too small to entertain delusions of self-sufficiency in anything. The economic action of the future, says Ohmae, will be in such regional clusters, spreading economic benefits to their neighboring regions.

The first two theses have much merit but have been around for some time. The third has some novelty, and a number of interesting observations are made, but the concept is too amorphous to be useful. In principle it encompasses many of the smaller European countries, which nonetheless have succumbed to the rigidities that the author observes in larger nations. The author is especially scathing about both foreign and domestic proponents of a Japanese "miracle" driven by a MITI-guided Japan, Inc.