Charles Murtaugh points me to this article in The Economist (via Orinn Judd). It argues that there is "...a trade-off between the benefits of scale and the costs of heterogeneity." Duh! That's why I'm a federalist, and when I'm less concerned about people wondering if I'm mentally ill, I openly moot the idea of breaking up these United States of America. Overall, it is something to think about in the context of America, the republic started out with 2.5 million people, only 10% being real political & economic stakeholders, but today we are 300 million people with universal sufferage over the age of 18. It's a pretty good code base that seems to have been extensible, but we might open ourselves to the possibility of a re-write to make it more modular.

In any case, I would like to add that though Charles seems to have a platonic crush on Orrin Judd, the dude makes the following assertion/comparison that seems a bit shallow:

"(2) China and India: neither has a snowball's chance of remaining whole."

That strikes me as kind of dumb. China has a 2,000 year history of cyclical oscillations between centralized rule and interregnums of political plurality. But, one pattern that seems to be marked is the tendency for the interregnums to shrink! In contrast, the history of India is one of political plurality, with central rule more often being imposed from the outside (Muslims), so Orrin is probably on solid ground making the assertion in that case.

The dumbness is not in predicting China's collapse (that happens now & then), but putting China and India together on the same line. India's political unity is a historical abberation, China's is not.

Godless comments:

Though I agree with some of the thesis (the heterogeneity vs. economy-of-scale tradeoff), I disagree with many of the points brought up by both Orrin and the writer. Among them:

1. Singapore is hardly homogeneous. It's got four official languages. So does Switzerland.
2. Cutting the list off at the top 10 is arbitrary - it includes boutique island nations like Bermuda and the Cayman Islands. Also, I'm not sure what their source is for the GDP-per-capita figures. The CIA world factbook is out of date on a lot of things (e.g. the ethnic composition of Britain), but let's assume its GDP-per-capita stats are ok. If we extend the CIA stats to the top 20 nations, the pattern disappears entirely. Now you have multimillion person nations. Among them: USA, Canada, Japan, Australia, Germany.
3. I agree that federalism is a big reason for America's success. I disagree that it is the only or even primary reason for America's success. America has only 3-4 times the population of Germany, but is far more ethnically heterogeneous. Is 60-80 million the upper limit beyond which centralized government is impossible? It's a questionable premise.
4. China and India are utterly different, as Razib pointed out. To make it more concrete - China is 92% Han. India by contrast has thousands of micro-races and micro-dialects.
5. Lastly, let me point out that there are tremendous transaction costs involved with "breaking up the United States". I don't think it's either realistic or necessary.

Bottom line: there are many factors that can unify a nation. Among them are race, religion, language, nationalism, and an external threat. Centralization of government becomes more difficult as less of these unifying factors exist, because it becomes harder to amalgamate preferences successfully.

But while the heterogeneity of nations is a consideration, it is not the only consideration. A far more robust predictor[1] of prosperity than size or heterogeneity is mean IQ. But the Economist can't write that. It is a fact, however, that the two prerequisites for wealth are a high mean IQ and a capitalist economy. That's why Iran and Vietnam will likely be prosperous if and when they shed the shackles of Islamism and communism respectively.

[1] Note that Griffe's analysis needs to be updated for 2002, as the East Asian countries have significantly higher GDP-per-capitas than those (older) statistics indicate. South Korea, Taiwan, Singapore, Japan, and Hong Kong are all first world nations (or quasi-nations in the case of HK). Malaysia's large Chinese minority is getting it close to first world status, and parts of China are already first world.