Working Paper: NBER ID: w21250
Authors: Enrico Spolaore
Abstract: This paper discusses the process of European institutional integration from a political-economy perspective, linking the long-standing political debate on the nature of the European project to the recent economic literature on political integration and disintegration. First, we introduce the fundamental trade-off between economies of scale associated with larger political unions and the costs from sharing public goods and policies among more heterogeneous populations, and examine the implications of the trade-off for European integration. Second, we describe the two main political theories of European integration - intergovernmentalism and functionalism - and argue that both theories capture important aspects of European integration, but that neither view provides a complete and realistic interpretation of the process. Finally, we critically discuss the actual process of European institutional integration and its limits, from its beginnings after World War II to the current crisis.
Keywords: No keywords provided
JEL Codes: F02; F15; F5; H41; H56; H77
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| heterogeneity (D29) | higher political costs (D72) |
| higher political costs (D72) | increased likelihood of civil conflict (F51) |
| larger and diverse groups (C92) | economies of scale in public goods provision (H49) |
| heterogeneity (D29) | costs associated with public goods provision (H49) |
| heterogeneity costs (F12) | constraints on integration (F02) |
| incomplete integration (D52) | challenges and crises (H12) |