States will only get smaller when the populace of the area has an incentive for smaller government (incentives include purely monetary incentives OR ideological/moral incentives)

When borders are open and anyone can come in, coupled with welfare, this provides a very strong monetary incentive for low IQ people to flock to the country and reap the rewards of the violence inflicted upon the productive people.

Closing borders means less financial predation will occur on the geographical inhabitants - who really are the "owners" of that geographical area given that they've paid for all the improvements, albiet involuntarily through taxes.