A Small Country in Europe's Integration. Generalizing the Political Economy of the Danish Case
AbstractA 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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Bibliographic InfoPaper provided by School of Economics and Management, University of Aarhus in its series Economics Working Papers with number 1998-7.
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Web page: http://www.econ.au.dk/afn/
Find related papers by JEL classification:
- F15 - International Economics - - Trade - - - Economic Integration
- F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
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- 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.
- 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.
- 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.
- Andersen, T.M. & Holden, S., 1998. "Business Cycles and Fiscal Policy in an Open Economy," Memorandum 12/1998, Oslo University, Department of Economics.
- 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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