This is a trend that I have noticed more and more over the years as a reviewer for a number of journals: a group of authors from country X submits a manuscript, where the vast majority (if not all) of the cited works are recent papers from other authors of the same country X. Remarkable cases that I have personally seen include a manuscript with 30+ references, all of research work entirely developed within a single country.
If the authors introduce a disproportionate number of self-citations, I think it is fair to raise the issue in my review. But what should I do, as a frequent reviewer, when I notice this "citational nationalism"? Should I point it out, or just let it slide?
I am not entirely comfortable with this practice, as it can be used as a way to boost citations while avoiding rejections: research groups on the same topic, all within the same country, generally tend to know each other well, so they can reach (possibly tacitly) a "I cite you, you cite me" kind of deal. At the very least, it makes me think that the authors did not perform a thorough and fair bibliographic review.
To be clear, I admit this could be justified in some fields. For instance, it seems reasonable to me that many of the scholars studying the history and culture of X work in X-based academic institutions; also, some "big science" projects are only developed at a handful of places worldwide. However, I am in a STEM field where the research is routinely carried out by groups all around the world and does not require any particularly hard-to-access tools.
How should I proceed in these cases?