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Widening and Deepening: Reforming the European Union

  • Erik Berglof
  • Mike Burkart
  • Guido Friebel
  • Elena Paltseva

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.

(This abstract was borrowed from another version of this item.)

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.98.2.133
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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 98 (2008)
Issue (Month): 2 (May)
Pages: 133-37

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Handle: RePEc:aea:aecrev:v:98:y:2008:i:2:p:133-37
Note: DOI: 10.1257/aer.98.2.133
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  1. Erik Berglöf & Mike Burkart & Guido Friebel & Elena Paltseva, 2009. "Club-in-the-Club: Reform under Unanimity," EPRU Working Paper Series 2009-07, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
  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. Mike Burkart & Klaus Wallner, 2000. "Club Enlargement: Early Versus Late Admittance," Econometric Society World Congress 2000 Contributed Papers 0253, Econometric Society.
  4. Legros, Patrick & Matthews, Steven A, 1993. "Efficient and Nearly-Efficient Partnerships," Review of Economic Studies, Wiley Blackwell, vol. 60(3), pages 599-611, July.
  5. Bard Harstad, 2006. "Flexible Integration? Mandatory and Minimum Participation Rules," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(4), pages 683-702, December.
  6. Avinash Dixit, 2003. "Clubs with Entrapment," American Economic Review, American Economic Association, vol. 93(5), pages 1824-1829, December.
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