Here are my thoughts:
The primary advantage of being big is self defense. In a world where wars are frequent, small countries tend to get swallowed up. But in the modern era, this doesn’t happen as often, and the United States is around as the world’s cop to protect small countries from larger aggressors.
Becker and Posner both point out that with globalization and free trade, countries no longer need to be self sufficient in all things, a factor favoring small countries. They even explain why small countries have an advantage in global trade.
Big countries lead to bigger, more bureaucratic, and less efficient government. Unnecessary laws are created that interfere with free markets and harm the country’s economy.
When the big country is compromised of different ethnic or religious groups which don’t get along well, this creates another problem which prevents the country from being efficiently run.
For some reason, our foreign policy seems to discourage the breaking up of countries. For example, one of our goals for Iraq was to keep it a single country even though it’s compromised of three different groups that don’t like each other very much.
Our foreign policy is backwards. We should be actively encouraging the splitting up of large countries into smaller ones.