The Political Economy of European Integration

21 Pages Posted: 26 Mar 2015

See all articles by Enrico Spolaore

Enrico Spolaore

Tufts University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: March 25, 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 successes and limitations of the actual process of European institutional integration, from its beginnings after World War II to the current crisis.

Keywords: European integration, heterogeneity costs, economies of scale, functionalism

JEL Classification: F500

Suggested Citation

Spolaore, Enrico, The Political Economy of European Integration (March 25, 2015). CESifo Working Paper Series No. 5247, Available at SSRN: https://ssrn.com/abstract=2584911

Enrico Spolaore (Contact Author)

Tufts University - Department of Economics ( email )

Medford, MA 02155
United States

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