If you are assuming that the XP rules are part of the "physics" of the game world, then every nation would seek ways to exploit those rules, in much the same way that modern society exploits hell out of real-world physics. The form of those exploits would depend on how the rules were applied, but the goal would be the same: Level up as many characters as possible, as fast as possible, in a controllable and predictable way. Adventures would not involve going on quests and exploring remote ruins. They would look more like tournaments or gladiatorial arenas, with combat being as lethal as necessary to ensure people keep leveling up.
You'd end up with a whole world like the Magic setting of Amonkhet. This is why I prefer to say that the XP rules are a contrivance to make the game more fun, which applies only to the PCs and does not represent how the world as a whole works.
You'd end up with a whole world like the Magic setting of Amonkhet. This is why I prefer to say that the XP rules are a contrivance to make the game more fun, which applies only to the PCs and does not represent how the world as a whole works.