Asylum Seekers in Europe: The Warm Glow of a Hot Potato

25 Pages Posted: 6 Nov 2004

See all articles by Giovanni Facchini

Giovanni Facchini

Tinbergen Institute

Oliver Lorz

RWTH Aachen University

Gerald Willmann

Bielefeld University; IfW Kiel; KU Leuven; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: October 29, 2004


The Common European Asylum System calls for increased coordination of the EU countries' policies towards asylum seekers and refugees. In this paper, we provide a formal analysis of the effects of coordination, explicitly modelling the democratic process through which policy is determined. In a symmetric, two-country citizen-candidate setup, in which accepting asylum seekers in one country generates a cross-border externality in the other, we show that coordination is desirable. Internalizing the externality leads to a welfare improvement over the non-cooperative outcome. However, contrary to suggestions by many observers, we show that allowing for cross-country transfers in the cooperative outcome leads to a welfare inferior outcome because the possibility of compensation exacerbates strategic delegation effects.

Keywords: Political Economy, Asylum Policy, Migration

JEL Classification: J61, H77, F22

Suggested Citation

Facchini, Giovanni and Lorz, Oliver and Willmann, Gerald, Asylum Seekers in Europe: The Warm Glow of a Hot Potato (October 29, 2004). Available at SSRN: or

Giovanni Facchini

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA


Oliver Lorz

RWTH Aachen University ( email )

Templergraben 55
D-52056 Aachen, 52056

Gerald Willmann (Contact Author)

Bielefeld University ( email )

Universit├Ątsstra├če 25
Bielefeld, NRW 33613

IfW Kiel ( email )

P.O. Box 4309
Kiel, Schleswig-Hosltein D-24100

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679

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