International Unions and Integration

62 Pages Posted: 16 Jun 2022 Last revised: 9 Dec 2022

See all articles by Oguzhan Celebi

Oguzhan Celebi

Massachusetts Institute of Technology (MIT) - Department of Economics

Elias Papaioannou

London Business School; Centre for Economic Policy Research (CEPR)

Date Written: June 6, 2022


We consider a model of international unions in which countries have heterogeneous preferences for integration and their integration decisions are strategic complements. We analyze equilibrium under several integration protocols that differ in the flexibility countries have in choosing how much to integrate. Unlike previous models with strategic substitutes, our results are in line with the evolution of the European Union (EU), where enlargement and flexible integration coincide with enhanced integration and are often spearheaded by the "core" countries. Moreover, when non-members (candidates, exiting countries, and other nations) can partially integrate with the union, as in practice, restrictions on their integration determine the union's size and scope and are necessary for fostering cooperation. Motivated by Brexit and the rise of euro-skepticism, we allow countries to leave the union and demonstrate how restrictions on the integration of leaving countries make the union robust to changes in members' preferences.

Keywords: International Agreements and Observance, International Organizations, Public Goods

JEL Classification: F53, H41

Suggested Citation

Celebi, Oguzhan and Papaioannou, Elias, International Unions and Integration (June 6, 2022). Available at SSRN: or

Oguzhan Celebi (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
Cambridge, MA 02142
United States

Elias Papaioannou

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

Centre for Economic Policy Research (CEPR) ( email )

United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics