Armstrong And EbEll thE Economics of scottish indEpEndEncE: introduction r1 would no longer house the UK’s nuclear weapons. Finding a new base would have significant costs which may lead to a reappraisal of the current policy with implications for other members of the North Atlantic Treaty Organisation. For all the fluidity of international borders and a near tripling of the number of independent states in the past sixty years, there are few examples of cordial separations which have not followed the end of colonialism or communism. If an important region within the European Union can secede from a sovereign state with ongoing membership to the international community, this would set an interesting precedent for other regions such as Catalunya, the Basque Country or Flanders. The settlement between the UK and an independent Scotland would be particularly important in terms of setting a precedent for the separation of highly indebted countries. Given the long lasting and far reaching consequences of the referendum, the Scottish and UK governments recognise the importance of making impartial information and analysis on key issues available to voters. Both governments support the particular role of the Economic and Social Research Council (ESRC) in funding independent research on Scottish independence and in assisting in planning for whichever outcome prevails. Three of the six articles in this Review are co-authored by ESRC Senior Scottish Fellows (Angus Armstrong, David Bell and Michael Keating) and four articles are co-authored by members of the ESRC’s Scottish Centre on Constitutional Change (Angus Armstrong, David Bell, Katerina Lisenkova and Michael Keating). We are grateful for this support and the opportunity to contribute to the debate on Scottish independence. The first paper, ‘Scotland’s economic performance and the fiscal implications of moving to independence’, by John McLaren and Jo Armstrong of Glasgow University’s Centre for Public Policy for Regions, provides an overview the economics of scottish independence: introduction Angus Armstrong and monique ebell On September 18th 2014 the people of Scotland will choose whether to remain part of the United Kingdom or to become an independent country. If Scotland becomes an independent country this would bring to a close one of the longest serving and most successful economic and political unions in the modern era. The process of Scottish devolution began in 1997, with the creation of the Scottish Parliament and Executive, and has been followed by more devolution of powers up to the Scotland Act 2012. Independence would be a fundamental and historic change. On the one hand it offers an opportunity for the Scottish government to choose its own economic, social and political framework. On the other, Scotland would no longer automatically be an integral part of risk-sharing arrangements within the UK, including monetary arrangements, welfare and pension provisions and defence. The outcome of the referendum could also have important consequences for the rest of the UK and indeed the world. The political balance of power in the rest of the UK would change decisively with the loss of the 59 Scottish MPs in Westminster, a majority of which have been Labour in recent decades. 1 This could lead to a rightward shift in the UK political balance, with consequences for all areas of policy. Even setting that political shift aside, the mere mechanics of Scottish independence will have an important impact on the UK. The UK will be left with a significantly higher public debt to GDP ratio, with gross debt to GDP possibly exceeding 100 per cent. Both the UK and Scotland might feel the impact of higher transactions costs on trade, as regulations gradually diverge. The political influence of the rest of the UK in Europe and other international forums is also likely to change. The consequences of the referendum may have ramifications well beyond these isles. The Scottish government has made clear that an independent Scotland