Introduced ants in Galápagos (Floreana Island) : importance of competition, coexistence and agressive behaviors

Abstract Invasive species represent with fragmentation of habitat the most serious threats to biodiversity in the world. Galápagos Archipelago, as most oceanic islands, suffers a high rate of introduced animals and plants that affect equilibrium and biodiversity of this unique biota. Ants rank among the most devastating invaders. Their social organization confer them a high ability to adapt and to spread in new environments forming rapidly populous communities. We studied the ant community of Floreana Island composed mainly of introduced species (at least 1 S). Introduction events occurred successively during last century. The last record is Monomorium destructor arrived in the eighties. Our aim is to investigate the modalities of interaction and coexistence of these introduced species. We highlighted the competition hierarchy of the coexisting species using attractive food baits. Two species behave as competitively dominant by monopolizing an important part of resources. They are M. destructor restricted to a small area and the fire ant Solenopsis geminata widely distributed on the island. Then we evaluated the relative importance of abiotic factors and interspecific competition in structuring the community. Ecological data were collected and presence and abundance of species were estimated using different methods in a wide range of habitats. Several species showed preferences either for arid or for humid areas. The little fire ant Wasmannia auropunctata, awell-known devastating species when introduced, was exclusively found in moist habitat in and around the agricultural area situated in the upper and central part of thé island. It coexists with other species in several parts but in a restricted perimeter it excludes all other ants and worker's density on the ground is nearly 70 times higher than ant's density in similar habitats occupied by several species. But most opportunist tramp species establish everywhere without particular ecological requirement. Analyses of species co-occurrences at various levels didn't reveal any marked effect of competition in structuring ant's assemblages. We supposed that the lack ofcompetition-derived structure has to be attributed to the dynamic of the system. Indeed, across the successive census of 1996, 2003, 2004 and 2005, species distributions and abundances appeared to be highly variables. In particular harsh conditions occurring in dry season in certain parts seem to be limiting to S. geminatai. We suggest that huge variations in the local distribution of the dominant S. geminata disrupt the community organization. Finally we conducted artificial ant confrontations to evaluate to what extend an aggressive behavior at the worker level maybe linked to the ecological success of a species on the island. S. geminata was rather indifferent when confronted to a submissive species on food sources, suggesting that its competitive dominance is largely due to a numerical superiority. On the other hand M. destructor exhibits a strong agonistic behavior in similar confrontations. As soon as the presence of a competitor is detected, most workers were observed to abandon foraging and to take part in physical aggressions. Since it is still restricted nearby its introduction spot two decades after its arrival, we suggest that the energetic cost of such an aggressive behavior prevent it to spread on that island already highly colonized. Dominant invasive species such as the fire ants S. geminata and W. auropunctata have negative impacts on Galápagos fauna, disturbing the hatching of land tortoises and birds. But very little is known about the impact of other exotic ants. Indeed, impact on arthropods and generally on ground-dwelling organisms is very diffcult to evaluate. As a consequence of the dynamic character of Floreana I. ant community it is difficult to build models or to málce predictions on evolution of introduced ant fauna. But Camponotus macilentus, an abundant endemic species seems today to be little affected by introduced ant species thanks to its strong interference competition ability and its preference for arid and harsh environments. Résumé Les espèces envahissantes représentent, avec la fragmentation du paysage, la plus grande menace pour la biodiversité. L'archipel des Galápagos, comme la plupart des îles du Pacifique, compte un grand nombre d'espèces introduites qui menacent la biodiversité de ce milieu unique.. Les fourmis sont parmi les envahisseurs les plus dévastateurs. Leur organisation sociale leur permet de s'adapter et de se propager pour devenir rapidement abondantes. Nous avons étudié la communauté de fourmis sur l'île de Floreana principalement composée d'espèces introduites (au moins 15). Les introductions se sont succédées au cours du siècle précédent. La dernière espèce recensée est Monomorium destructor introduite dans les années 80. Notre objectif est de mettre à jour les modalités des interactions et de la coexistence de ces espèces introduites. Nous avons mis en évidence la hiérarchie de compétition des différentes espèces à l'aide d'appâts de nourriture. Deux espèces se comportent de façon dominante en monopolisant une part importante des ressources. Ce sont M. destructor, restreintes à un petit périmètre, et la fourmi de feu Solenopsis geminata, largement distribuée sur l'île. Nous avons évalué l'importance relative des facteurs abiotiques et de la compétition interspécifique dans la structuration des peuplements. Des données écologiques ont été collectées et la présence et l'abondance des espèces ont été estimées à l'aide de trois méthodes au sein d'une grande diversité d'habitats. Plusieurs espèces .montrent des préférences soit pour les milieux humides, soit pour les milieux arides. La petite fourmi de feu Wasmannia auropunctata, une espèce connue pour être dévastatrice dans ses sites d'introduction, est présente exclusivement dans les habitats humides dans et à proximité de la zone agricole située dans la partie centrale de l'île. Elle coexiste en plusieurs points avec d'autres espèces mais au sein d'un périmètre restreint elle exclut toute autre fourmi et atteint des densités record au sol presque 70 fois supérieures aux densités de fourmis observées sur les sites voisins occupés par plusieurs espèces. Mais la plupart des espèces vagabondes opportunistes s'établissent partout sans exigences écologiques particulières. Des analyses de cooccurrence d'espèces à plusieurs niveaux n'ont pas révélé de rôle marqué de la compétition dans la structuration des communautés. Nous supposons que l'absence d'une telle structure doit être attribuée à la dynamique du système. En effet, au cours des différents recensements de 1996-1997, 2003, 2004 et 2005, la distribution et l'abondance des espèces était très variable. En particulier, les conditions rudes qui règnent dans la zone aride durant la saison sèche semblent affecter particulièrement S. geminata. Nous suggérons que de fortes variations dans la distribution de l'espèce dominante perturbent l'orgaiùsation des communautés. Finalement nous avons effectué des confrontations artificielles pour évaluer dans quelle mesure un comportement agressif au niveau de l'ouvrière peut être lié au succès écologique d'une espèce sur l'île. S. geminata montre très peu de réaction face à une espèce subordonnée sur une même source de nourriture, ce qui laisse supposer que sa dominance est largement due à sa supériorité numérique. Par contre, dans des conditions similaires, M. destructor est fortement agressive. En présence d'un compétiteur, la plupart des ouvrières renoncent très vite à leur activité de fourragement pour agresser les individus de l'autre espèce. Puisque deux décennies après son introduction elle est toujours confinée à son point d'arrivée, nous supposons que le coût en énergie et en ouvrières de ce comportement très agressif est un obstacle à son expansion sur cette île déjà fortement colonisée. Les espèces envahissantes dominantes comme les fourmis de feu S. geminata et W. auropunctata sont connues pour leur impact négatif sur la faune des Galápagos, entre autre sur les jeunes des tortues terrestres et des oiseaux. Mais nous savons très peu de choses sur l'impact des autres espèces de fourmis introduites. En effet, l'impact sur les arthropodes, et plus généralement sur la faune du sol, est très difficile à évaluer. En raison du caractère dynamique de la communauté de fourmi de Floreana, il est difficile de construire des modèles et de faire des prédictions sur l'évolution des peuplements de fourmis introduites. Mais Camponotus macilentus, une espèce endémique abondante, semble aujourd'hui peu affectée par les espèces introduites grâce à ses capacités de compétition par interférence et sa préférence pour les milieux arides. Resumen Las, especies invasoras representan, junto con la fragmentación del paisaje, la mayor amenaza para la biodiversidad. El archipiélago de Galápagos, como la mayoría de las islas del Pacífico, cuenta con un gran número de especies introducidas que amenazan la biodiversidad de este lugar único. Las hormigas son uno de los invasores más devastadores. Su organización social les permite adaptarse y propagarse para ser rápidamente abundante. Estudiamos la comunidad de hormigas de la isla Floreana principalmente compuesta de especies introducidas (al menos 15). Las introducciones se sucedieron durante el siglo anterior. La última especie contabilizada es Monomorium destructor introducida en los años 80. Nuestro objetivo es poner al día las modalidades de las interacciones y de la coexistencia de estas especies introducidas. Pusimos de relieve la jerarquía de competencia de las distintas especies con ayuda de cebos de comida. Dos especies se implican de manera dominante monopolizando una parte importante de los recursos. Son M. destructor, limitado a un pequeño perímetro, y la hormiga de fuego Solenopsis geminata; ampliamente distribuida por la isla. Evaluamos la importancia relativa de los factores abióticos y de la competencia interespecífica en la estructuración de la communidad. Se recogieron algunos datos ecológicos y se consideraron la presencia y la abundancia de las especies con ayuda de tres métodos en una gran diversidad de hábitats. Varias especies muestran preferencias o por los medios húmedos, o por los medios áridos. La pequeña hormiga de fuego Wasmannia auropunctata, una especie conocida por ser devastadora en sus lugares de introducción, está presente exclusivamente en los hábitats húmedos y cerca de la zona agrícola situada en la parte central de la isla. Coexiste en varios puntos con otras especies pero en un perímetro limitado excluye a cualquier otra hormiga y alcanza densidades en el suelo casi 70 veces superiores a las densidades de hormigas observadas en los lugares vecinos ocupados por varias especies. Pero la mayoría de las especies vagabundas oportunistas se establecen por todas partes sin exigencias ecológicas particulares. Análisis de cooccurrencía de las especies a varios niveles no revelaron una grande importancía de la competencia en la estructuración de las comunidades. Suponemos que la ausencia de tal estructura Bebé ser por la dinámica del sistema. Efectivamente, durante los distintos censos de 1996-1997, 2003,.2004 y 2005, la distribución ? la abundancia de las especies eran muy variables. En particular, las condiciones drásticas que reinan en la zona árida durante la temporada seca parecen afectar especialmente a S. geminata. Sugerimos que fuertes variaciones en la distribución de la especie dominante perturben la organización de las comunidades. Finalmente efectuamos confrontaciones artificiales para evaluar hastá que punto un comportamiento agresivo a nivel de la obrera puede explicar el éxito ecológico de una especie en la isla. S. geminata muestra muy poca reacción ante una especie subordinada mientras comparten la misma comida, lo que deja suponer que su dominancia se debe a su superioridad numérica. Por el contrario, en condiciones similares, M. destructor es muy agresivo. En presencia de otra especie, la mayóría de las obreras renuncian muy rápidamente a alimentarse para atacar a los individuos de la otra especie. Puesto que dos décadas después de su introducción todavía se confina en su punto de llegada, suponemos que el coste en energía y en obreras de este comportamiento muy agresivo es un obstáculo a su extensión en esta isla ya muy colonizada. Las especiés invasoras dominantes como las hormigas de fuego S. geminata y W. auropunctata son conocidas por su impacto negativo en la fauna de Galápagos, entre otras cosas sobre los juveniles de las tortugas terrestres y pájaros. Pero sabemos muy poco sobre el impacto de las otras especies de hormigas introducidas. Efectivamente es muy difïcil de evaluar el impacto en los artrópodos, y más generalmente en la fauna del suelo. Debido al carácter dinámico de la comunidad de hormiga de Floreana, es diEcil construir modelos y hacer predicciones sobre la evolución de las poblaciones de hormigas introducidas. Pero Camponotus macilentus, una especie endémica abundante, parece poco afectadá hoy por las especies introducidas gracias a sus capacidades de competencia por interferencia y su preferencia por los medios áridos.

Jambes lourdes, insuffisance veineuse des membres inférieurs et hormonothérapie substitutive [Heavy legs, venous insufficiency of the legs and hormone substitution therapy]

The effects of estrogens and gestagens on veins and circulation have been studied since prescription of these hormones as oral contraception and description of related thromboembolic events. The identification of different receptors and the description of these receptors in venous walls have helped to understand some hormonal effects. However, the actual knowledge remains insufficient to explain the complexity of the actions of hormones on venous function. The distribution, the density and the receptor types vary with age, gender, hormonal status and vascular bed. Gestagens mainly reduce the tone of venous walls, whereas estrogens have various effects. Between 25% and 50% of European adults and even 80% or more in some risk groups complain about heavy legs, with or without chronic venous insufficiency. The number of women to whom hormonal substitution is or could be prescribed increases along with aging of populations and the better understanding of potential benefits. The need for a better understanding of vascular effects of sexual hormones is growing, since the incidence of chronic venous insufficiency of the legs increases with age. The life prognosis will not be affected by a deterioration of a chronic venous insufficiency. In contrast, the quality of life, morbidity and the cost of treatment will be expected to change. In addition, thromboembolic events have to be considered, as has been shown in recent studies. These findings outline the need for further studies on the relation between hormones and venous function and for some caution when prescribing hormonal substitution.

On the computational security of a distributed key distribution scheme

In a distributed key distribution scheme, a set of servers helps a set of users in a group to securely obtain a common key. Security means that an adversary who corrupts some servers and some users has no information about the key of a noncorrupted group. In this work, we formalize the security analysis of one such scheme which was not considered in the original proposal. We prove the scheme is secure in the random oracle model, assuming that the Decisional Diffie-Hellman (DDH) problem is hard to solve. We also detail a possible modification of that scheme and the one in which allows us to prove the security of the schemes without assuming that a specific hash function behaves as a random oracle. As usual, this improvement in the security of the schemes is at the cost of an efficiency loss.

Determination and Evaluation of Alternative Methods for Managing and Controlling Highway-Related Dust Phase II—Demonstration Project, June 2005

The State of Iowa currently has approximately 69,000 miles of unpaved secondary roads. Due to the low traffic count on these unpaved o nts as ng e two dust ed d roads, paving with asphalt or Portland cement concrete is not economical. Therefore to reduce dust production, the use of dust suppressants has been utilized for decades. This study was conducted to evaluate the effectiveness of several widely used dust suppressants through quantitative field testing on two of Iowa’s most widely used secondary road surface treatments: crushed limestone rock and alluvial sand/gravel. These commercially available dust suppressants included: lignin sulfonate, calcium chloride, and soybean oil soapstock. These suppressants were applied to 1000 ft test sections on four unpaved roads in Story County, Iowa. Tduplicate field conditions, the suppressants were applied as a surface spray once in early June and again in late August or early September. The four unpaved roads included two with crushed limestone rock and two with alluvial sand/gravel surface treatmewell as high and low traffic counts. The effectiveness of the dust suppressants was evaluated by comparing the dust produced on treated and untreated test sections. Dust collection was scheduled for 1, 2, 4, 6, and 8 weeks after each application, for a total testiperiod of 16 weeks. Results of a cost analysis between annual dust suppressant application and biennial aggregate replacement indicated that the cost of the dust suppressant, its transportation, and application were relatively high when compared to that of thaggregate types. Therefore, the biennial aggregate replacement is considered more economical than annual dust suppressant application, although the application of annual dust suppressant reduced the cost of road maintenance by 75 %. Results of thecollection indicated that the lignin sulfonate suppressant outperformed calcium chloride and soybean oil soapstock on all four unpavroads, the effect of the suppressants on the alluvial sand/gravel surface treatment was less than that on the crushed limestone rock, the residual effects of all the products seem reasonably well after blading, and the combination of alluvial sand/gravel surface treatment anhigh traffic count caused dust reduction to decrease dramatically.

A Case Study of China’s Commercial Pork Value Chain, August 2005

In China, with the cost of improved technology rising, surplus labor shrinking, and demand for food quality and safety increasing, it will be just a matter of time before the country’s hog production sector will be commercialized like that of developed countries. However, even if China’s cost of production converges to international levels, as shown in this case study, China may continue to retain some competitive advantage because of the labor-intensive nature of the marketing services involved in hog processing and meat distribution. The supply of variety meats offers the most promising market opportunity for foreign suppliers in China. The market may open further if the tariff rate for variety meats is reduced from 20% and harmonized with the pork muscle meat rate of 12%, and if the value-added tax of 13% is applied equally to both imported and domestic products. The fast-growing Western-style family restaurant and higher-end dining sector is another market opportunity for high-quality imported pork.

Farm-Level Analysis of Risk Management Proposals, March 2000

This paper presents a detailed report of the representative farm analysis (summarized in FAPRI Policy Working Paper #01-00). At the request of several members of the Committee on Agriculture, Nutrition, and Forestry of the U.S. Senate, we have continued to analyze the impacts of the Farmers’ Risk Management Act of 1999 (S. 1666) and the Risk Management for the 21st Century Act (S. 1580). Earlier analysis reported in FAPRI Policy Working Paper #04-99 concentrated on the aggregate net farm income and government outlay impacts. The representative farm analysis is conducted for several types of farms, including both irrigated and non-irrigated cotton farms in Tom Green County, Texas; dryland wheat farms in Morton County, North Dakota and Sumner County, Kansas; and a corn farm in Webster County, Iowa. We consider additional factors that may shed light on the differential impacts of the two plans. 1. Farm-level income impacts under alternative weather scenarios. 2. Additional indirect impacts, such as a change in ability to obtain financing. 3. Implications of within-year price shocks. Our results indicate that farmers who buy crop insurance will increase their coverage levels under S. 1580. Farmers with high yield risk find that the 65 percent coverage level maximizes expected returns, but some who feel that they obtain other benefits from higher coverage will find that the S. 1580 subsidy schedule significantly lowers the cost of obtaining the additional coverage. Farmers with lower yield risk find that the increased indemnities from additional coverage will more than offset the increase in producer premium. In addition, because S. 1580 extends its increased premium subsidy percentages to revenue insurance products, farmers will have an increased incentive to buy revenue insurance. Differences in the ancillary benefits from crop insurance under the baseline and S. 1580 would be driven by the increase in insurance participation and buy-up. Given the same levels of insurance participation and buy-up, the ancillary benefits under the two scenarios would be the same.

Towards the automatic merging of language resources

Language Resources are a critical component for Natural Language Processing applications. Throughout the years many resources were manually created for the same task, but with different granularity and coverage information. To create richer resources for a broad range of potential reuses, nformation from all resources has to be joined into one. The hight cost of comparing and merging different resources by hand has been a bottleneck for merging existing resources. With the objective of reducing human intervention, we present a new method for automating merging resources. We have addressed the merging of two verbs subcategorization frame (SCF) lexica for Spanish. The results achieved, a new lexicon with enriched information and conflicting information signalled, reinforce our idea that this approach can be applied for other task of NLP.

Towards the Automatic Merging of Lexical Resources: Automatic Mapping

Lexical Resources are a critical component for Natural Language Processing applications. However, the high cost of comparing and merging different resources has been a bottleneck to have richer resources with a broad range of potential uses for a significant number of languages.With the objective of reducing cost byeliminating human intervention, we present a new method for automating the merging of resources,with special emphasis in what we call the mapping step. This mapping step, which converts the resources into a common format that allows latter the merging, is usually performed with huge manual effort and thus makes the whole process very costly. Thus, we propose a method to perform this mapping fully automatically. To test our method, we have addressed the merging of two verb subcategorization frame lexica for Spanish, The resultsachieved, that almost replicate human work, demonstrate the feasibility of the approach.

A Method Towards the Fully Automatic Merging of Lexical Resources

Lexical Resources are a critical component for Natural Language Processing applications. However, the high cost of comparing and merging different resources has been a bottleneck to obtain richer resources and a broader range of potential uses for a significant number of languages. With the objective of reducing cost by eliminating human intervention, we present a new method towards the automatic merging of resources. This method includes both, the automatic mapping of resources involved to a common format and merging them, once in this format. This paper presents how we have addressed the merging of two verb subcategorization frame lexica for Spanish, but our method will be extended to cover other types of Lexical Resources. The achieved results, that almost replicate human work, demonstrate the feasibility of the approach.

Effect of biomagnetic therapy versus physiotherapy for treatment of knee osteoarthritis: a randomized controlled trial.

OBJECTIVE: To assess the effectiveness of pulsed signal therapy in the treatment of knee osteoarthritis (Kellgren II or III). METHODS: A randomized, double-blind controlled clinical trial. The first 95 patients sent to the clinic with knee osteo-arthritis were selected and randomized into treatment with pulsed signal therapy or conventional physiotherapy. Assessment included recording of usual demographic data, pertinent history, baseline medication and radiographs. Clinical evaluation was made at baseline, 6 weeks and 6 months after the end of treatment by the same blinded doctor. At each follow-up time, the patient was asked to complete a visual analogue pain scale and a Lequesne score. The doctor recorded the degree of pain on motion and the ability to move the affected knee. RESULTS: Both treatments resulted in significant improvements in pain and physical function. A statistical difference was observed only for activities of daily living, where the physiotherapy was more efficient (p<0.03). The cost of treatment with pulsed signal therapy was significantly higher, double the treatment cost of conventional physiotherapy. CONCLUSION: Like physiotherapy, pulsed signal therapy has improved the clinical state of treated patients but with no significant statistical difference. Pulsed signal therapy is, however, more expensive.

The dynamics of the Swiss electricity market : three essays

Executive Summary Electricity is crucial for modern societies, thus it is important to understand the behaviour of electricity markets in order to be prepared to face the consequences of policy changes. The Swiss electricity market is now in a transition stage from a public monopoly to a liberalised market and it is undergoing an "emergent" liberalisation - i.e. liberalisation taking place without proper regulation. The withdrawal of nuclear capacity is also being debated. These two possible changes directly affect the mechanisms for capacity expansion. Thus, in this thesis we concentrate on understanding the dynamics of capacity expansion in the Swiss electricity market. A conceptual model to help understand the dynamics of capacity expansion in the Swiss electricity market is developed an explained in the first essay. We identify a potential risk of imports dependence. In the second essay a System Dynamics model, based on the conceptual model, is developed to evaluate the consequences of three scenarios: a nuclear phase-out, the implementation of a policy for avoiding imports dependence, and the combination of both. We conclude that the Swiss market is not well prepared to face unexpected changes of supply and demand, and we identify a risk of imports dependence, mainly in the case of a nuclear phase-out. The third essay focus on the opportunity cost of hydro-storage power generation, one of the main generation sources in Switzerland. We use and extended version of our model to test different policies for assigning an opportunity cost to hydro-storage power generation. We conclude that the preferred policies are different for different market participants and depend on market structure.

Sovereign Risk, Anonymous Markets, and the Effects of Globalization

The goal of this paper is to study the e¤ects of globalization on the workings of financial markets. We adopt a "technological" view of globalization, which consists of an exogenous reduction in the cost of shipping goods across di¤erent regions of the world. We model financial markets where agents anonymously trade securities issued by every other agent in the world. In the absence of frictions, we show how globalization creates trade opportunities among residents of different regions of the world, thereby raising welfare. In the presence of sovereign risk, however, there emerge two crucial interactions between trade among residents within a region and trade among residents of di¤erent regions. First, the more residents within a region trade with each other, the more they can trade with residents of other regions. Second, the possibility of trade with residents of other regions sometimes leads a government to not enforce payments by its residents, destroying trade opportunities among residents within the region. The net effect on welfare of this process of creation and destruction of trade opportunities is ambiguous. We argue that there are no policies governments can take to avoid the negative effects of globalization on trade among domestic residents. In a dynamic extension, we analyze how our results are a¤ected by reputational considerations.

Assessing the Political Viability of Labour Market Reform: The Case of Employment Protection

We analyze the political support for employment protection legislation. Unlike my previous work on the same topic, this paper pays a lot of attention to the role of obsolescence in the growth process. In voting in favour of employment protection, incumbent employees trade off lower living standards (because employment protection maintains workers in less productive activities) against longer job duration. The support for employment protection will then depend on the value of the latter relative to the cost of the former. We highlight two key deeterminants of this trade-off: first, the workers' bargaining power, second, the economy's growth rate-more precisely its rate of creative destruction.

Optimal Design of Permit Markets with an Ex Ante Pollution Target, August 2006

In this paper, we examine the design of permit trading programs when the objective is to minimize the cost of achieving an ex ante pollution target, that is, one that is defined in expectation rather than an ex post deterministic value. We consider two potential sources of uncertainty, the presence of either of which can make our model appropriate: incomplete information on abatement costs and uncertain delivery coefficients. In such a setting, we find three distinct features that depart from the well-established results on permit trading: (1) the regulator’s information on firms’ abatement costs can matter; (2) the optimal permit cap is not necessarily equal to the ex ante pollution target; and (3) the optimal trading ratio is not necessarily equal to the delivery coefficient even when it is known with certainty. Intuitively, since the regulator is only required to meet a pollution target on average, she can set the trading ratio and total permit cap such that there will be more pollution when abatement costs are high and less pollution when abatement costs are low. Information on firms’ abatement costs is important in order for the regulator to induce the optimal alignment between pollution level and abatement costs.

On Globalization and the Growth of Governments

This paper investigates the relationship between trade openness and the size of government, both theoretically and empirically. We show that openness can increase the size of governments through two channels: (1) a terms of trade externality, whereby trade lowers the domestic cost of taxation and (2) the demand for insurance, whereby trade raises risk and public transfers. We provide a unified framework for studying and testing these two mechanisms. First, we show how their relative strength depends on a key parameter, the elasticity of substitution between domestic and foreign goods. Second, while the terms of trade externality leads to inefficiently large governments, the increase in public spending due to the demand for insurance is optimal. We show that large volumes of trade may result in welfare losses if the terms of trade externality is strong enough while small volumes of trade are always beneficial. Third, we provide new evidence on the positive association between openness and the size of government and test whether it is consistent with the terms of trade externality or the demand for insurance. Our findings suggest that the positive relationship is remarkably robust and that the terms of trade externality may be the driving force behind it, thus raising warnings that globalization may have led to inefficiently large governments.