I’m far from an expert on LOESS (in fact, I hadn’t heard the term before now), but it looks like it doesn’t perform a comparable function to MIC. LOESS seems to be an algorithm for producing a non-linear regression while MIC is an algorithm to measure the strength of a relationship between two variables.
In the paper (figure 2A), they compare it to Pearson correlation coefficient, Spearman rank correlation, mutual information, CorGC, and maximal correlation on data in a variety of shapes. Basically, it is effective on a wider range of shapes than any of them.
In the case of countries, the main problem seems to be that as you grow the population becomes more culturally heterogeneous. People on average disagree more with whatever federal policies are chosen, giving them a reason to split off into smaller countries. Also there are increasing coordination costs in size.
http://www.eco.uc3m.es/docencia/MicroReadingGroup/Ruben.pdf