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Widening and Deepening: Reforming the European Union

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  • Berglöf, Erik
  • Burkart, Mike
  • Friebel, Guido
  • Paltseva, Elena

Abstract

This short paper analyses the tension between "widening" and "deepening" of organizations such as the European Union. Members have the same consumption benefit of reform but weak and strong members differ in their cost of exerting reform efforts. As decisions are taken by unanimity, the reform level is determined by the weakest member. However, strong members can coerce weak members to exert more effort by threatening to form a "club-in-the-club". Widening (bringing in additional members into the Union) can have different effects on deepening (more reform effort). When a new member is stronger than the weakest incumbent member, deepening and widening are complements, that is, the Union-wide reform efforts increase. When a new member is weaker, deepening and widening can be substitutes, and the reform efforts in the Union may fall. Our analysis helps to understand the history of the EU treaties, in particular the differences between enlargement waves such as the Northern vs. the Eastern Enlargement. It also rationalizes the general move from unanimity voting to different types of majority.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6672.

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Date of creation: Feb 2008
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Handle: RePEc:cpr:ceprdp:6672

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Keywords: Club-in-the-club; Reform; Resistance to change; Unanimity;

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References

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  1. Burkart, Mike & Wallner, Klaus, 2000. "Club Enlargement: Early Versus Late Admittance," CEPR Discussion Papers 2600, C.E.P.R. Discussion Papers.
  2. Bordignon, Massimo & Brusco, Sandro, 1999. "Optimal secession rules," ZEW Discussion Papers 99-51, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  3. Bard Harstad, 2006. "Flexible Integration? Mandatory and Minimum Participation Rules," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(4), pages 683-702, December.
  4. Patrick Legros & Steven A. Matthews, 1992. "Efficient and Nearly Efficient Partnerships," Discussion Papers 991R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  5. Avinash Dixit, 2003. "Clubs with Entrapment," American Economic Review, American Economic Association, vol. 93(5), pages 1824-1829, December.
  6. Berglöf, Erik & Burkart, Mike & Friebel, Guido & Paltseva, Elena, 2012. "Club-in-the-club: Reform under unanimity," Journal of Comparative Economics, Elsevier, vol. 40(3), pages 492-507.
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Cited by:
  1. Oliver Lorz & Gerald Willmann, 2013. "Size versus scope: on the trade-off facing economic unions," International Tax and Public Finance, Springer, vol. 20(2), pages 247-267, April.

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