Suppose Megan is considering emigrating from her home country. A fictional country of Klaxon has the same policies and institutions as Megan's home country, except that it has greater price stability. If Megan's decision to emigrate is based solely on the prospects for economic growth, she would.

Following Megan's decision, the western-most province of Klaxon separates from the rest of the country to form a new country, West Klaxon. West Klaxon plans to retain all the policies and institutions of Klaxon, except that West Klaxon will have less certainty in the rule of law. As a result, West Klaxon is aattractive emigration destination, from an economic perspective, than Klaxon.