Specific Enlargement and the EU Enlargement
AbstractThis Paper analyses a hold-up problem in the EU enlargement process. EU-specific anticipatory investments of private firms lower the governments outside option. The EU takes advantage of the applicants' increased dependency and extracts more surpluses through entrance conditions that benefit it and impose huge costs on applicants. If private firms pay less than the full entrance fee in taxes, enlargement immiserises the entrant. While in practice an applicant may possess sufficient bargaining power to avoid immiserisation, the hold-up problem reduces its potential gains from joining the EU. This result suggests that previous calculations, ignoring both the applicants' costs of joining the EU and the dynamics of their bargaining position during the negotiations, overestimate the welfare effects of membership.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2837.
Date of creation: Jun 2001
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Find related papers by JEL classification:
- D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
- F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
- F15 - International Economics - - Trade - - - Economic Integration
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.