The Political Economy of European Integration

22 Pages Posted: 15 Jun 2015 Last revised: 26 Jul 2023

See all articles by Enrico Spolaore

Enrico Spolaore

Tufts University - Department of Economics

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Date Written: June 2015

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.

Suggested Citation

Spolaore, Enrico, The Political Economy of European Integration (June 2015). NBER Working Paper No. w21250, Available at SSRN: https://ssrn.com/abstract=2618641

Enrico Spolaore (Contact Author)

Tufts University - Department of Economics ( email )

Medford, MA 02155
United States

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