International Unions

Alesina, Alberto F.; Angeloni, Ignazio; Etro, Federico

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International Unions

39 Pages Posted: 22 Jul 2003

See all articles by Alberto F. Alesina

Alberto F. Alesina

Harvard University - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Ignazio Angeloni

Italian Finance Ministry - International Financial Relations

Federico Etro

Harvard University - Department of Economics; National Bureau of Economic Research (NBER); Ministry of Economy, Italy

There are 2 versions of this paper

Date Written: May 2003

Abstract

We model an international union as a group of countries deciding together on the provision of public goods or policies that generate spillovers across members. The trade-off between benefits of coordination and loss of independent policy-making endogenously determines size, composition and scope of the union. Policy uniformity reduces the union's size, may block enlargement processes and induce excessive centralization. We study flexible rules with non-uniform policies that reduce these inefficiencies focusing on arrangements relevant in the context of existing unions or federal states, like enhanced cooperation, subsidiarity, federal mandates and earmarked grants.

Keywords: Federalism, political economy, European Union, international unions

JEL Classification: D78, H11, H41

Suggested Citation: Suggested Citation

Alesina, Alberto F. and Angeloni, Ignazio and Etro, Federico, International Unions (May 2003). Available at SSRN: https://ssrn.com/abstract=427120