This article provides a general theory explaining the geographic and popula
tion size and wealth of nations. Successful countries create conditions for
high productivity in the economic sphere by enforcing property rights and
providing social overhead capital and at the same time minimize political c
osts by creating a system of rules that reduce influence costs and allow fo
r diverse preferences. Countries also need an effective military apparatus
to protect their wealth from predation by other countries. Success in these
endeavors may lead to immigration and geographical expansion, but an inabi
lity to meet these goals may lead to extensive emigration or breakup of the
country. The argument is done within the context of a formal model that in
tegrates spatial political costs with the benefits of spatially determined
economic production and the effect of coercive transfers. The analysis is u
sed to provide insight into secessions and mergers of nation-states.