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A Small Country in Europe's Integration. Generalizing the Political Economy of the Danish Case

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Author Info

  • Martin Paldam

    () (University of Aarhus, Denmark)

Abstract

A contract between a small country and a large organization is analyzed using an Edgeworth-Box model. The population of the country is divided into two groups: people and elite. The contract has two explicit parameters: an exchange of sovereignty and a net transfer. A small country is defined as one where people consider the power they gain in the organization to be infinitesimal. The elite recognize that they get a net opwer gain. Further, there are two implicit parameters, the big-country advantage and some rents. It is shown that the lens for the elite is much larger than the lens for the population. In a dynamic integration process the contract will inevitably leave the lens. It is finally discussed if it is likely that the resistance of people will erode over time.

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File URL: ftp://ftp.econ.au.dk/afn/wp/98/wp98_7.pdf
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Bibliographic Info

Paper provided by School of Economics and Management, University of Aarhus in its series Economics Working Papers with number 1998-7.

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Length: 19
Date of creation:
Date of revision:
Handle: RePEc:aah:aarhec:1998-7

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Web page: http://www.econ.au.dk/afn/

Related research

Keywords: International coordination/integration;

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References

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  1. Philipp J.H. Schroeder, . "The Fiscal Constraint to Restructuring of Firms in Transition Economies," Economics Working Papers 1998-2, School of Economics and Management, University of Aarhus.
  2. Philipp J.H. Schroeder, . "How Stakes in Restructuring put Restructuring at Stake," Economics Working Papers 1998-1, School of Economics and Management, University of Aarhus.
  3. Torben M. Andersen & Steinar Holden, . "Business Cycles and Fiscal Policy in an Open Economy," Economics Working Papers 1998-5, School of Economics and Management, University of Aarhus.
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Cited by:
  1. Martin Paldam & Gert Tinggaard Svendsen & Gert Tinggaard Svendsen, . "An Essay on Social Capital. Reflections on a Concept Linking Social Sciences," Economics Working Papers 1998-8, School of Economics and Management, University of Aarhus.

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