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European Integration at the Crossroads: A Review Essay on the 50th Anniversary of Bela Balassa's Theory of Economic Integration


  • André Sapir


Bela Balassa's Theory of Economic Integration, published fifty years ago, is a remarkable, yet little known book. This essay reviews developments in the economic literature and in the process of European integration since the book's publication, showing that it was incredibly prescient. It anticipated by more than twenty years the modern literature on economic integration that emphasizes scale economies, imperfect competition, and economic geography. It also predicted that monetary union cannot function properly without political unification, a condition well illustrated by the recent euro-debt crisis that is likely to be a watershed in the history of European integration. (JEL B31, F15, F36, G01)

Suggested Citation

  • André Sapir, 2011. "European Integration at the Crossroads: A Review Essay on the 50th Anniversary of Bela Balassa's Theory of Economic Integration," Journal of Economic Literature, American Economic Association, vol. 49(4), pages 1200-1229, December.
  • Handle: RePEc:aea:jeclit:v:49:y:2011:i:4:p:1200-1229 Note: DOI: 10.1257/jel.49.4.1200

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    References listed on IDEAS

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    Cited by:

    1. Andrea Bonilla, 2014. "External vulnerabilities and economic integration. Is the Union of South American Nations a promising project ?," Working Papers halshs-00945044, HAL.
    2. Campos, Nauro F & Coricelli, Fabrizio & Moretti, Luigi, 2015. "Norwegian Rhapsody? The Political Economy Benefits of Regional Integration," IZA Discussion Papers 9098, Institute for the Study of Labor (IZA).
    3. Campos, Nauro F & Coricelli, Fabrizio & Moretti, Luigi, 2014. "Economic Growth and Political Integration: Estimating the Benefits from Membership in the European Union Using the Synthetic Counterfactuals Method," CEPR Discussion Papers 9968, C.E.P.R. Discussion Papers.
    4. Yvonne Sperlich, 2015. "From power transition to economic integration theory: A review of the BRICS literature," Research Papers by the Institute of Economics and Econometrics, Geneva School of Economics and Management, University of Geneva 15101, Institut d'Economie et Econométrie, Université de Genève.
    5. Dominik Naeher, 2015. "An Empirical Estimation of Asia's Untapped Regional Integration Potential Using Data Envelopment Analysis," Asian Development Review, MIT Press, vol. 32(2), pages 178-195, September.
    6. Iulia Andreea Bucur & Mircea Muntean, 2014. "An Overview Of Fiscal Consolidation Process In The European Union," Studies and Scientific Researches. Economics Edition, "Vasile Alecsandri" University of Bacau, Faculty of Economic Sciences, issue 20.
    7. Christian Keuschnigg, 2012. "Should Europe Become a Fiscal Union?," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(1), pages 35-43, April.
    8. Andrea Bonilla Bolanos, 2014. "External Vulnerabilities And Economic Integration: Is The Union Of South American Nations A Promising Project?," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 39(2), pages 97-131, June.
    9. David B. Audretsch & Erik E. Lehmann, 2016. "Industrial policy in Italy and Germany: yet another look," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 43(3), pages 291-304, September.
    10. Wolfinger, Julia & Köhler, Ekkehard, 2017. "The Draghi-Put: When unexpected words on joint liability speak louder than actions," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168265, Verein für Socialpolitik / German Economic Association.
    11. WARBURTON Christopher E.S., 2014. "Time Dynamics Of Stabilization Theories And Responses To Debt And Financial Crises: An Analysis Of Mexico, Argentina, Nigeria And Ghana, 1960-2011," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 14(2).
    12. Nauro F Campos & Fabrizio Coricelli, 2017. "EU Membership, Mrs Thatcher’s Reforms and Britain’s Economic Decline," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 59(2), pages 169-193, June.
    13. repec:kap:iaecre:v:21:y:2015:i:3:p:275-285 is not listed on IDEAS
    14. Christian Keuschnigg & Klaus Weyerstrass, 2015. "Macroeconomic Adjustment and Institutional Reforms in the Euro Area," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 21(3), pages 275-285, August.
    15. Neumann, Dirk & Bargain, Olivier & Dolls, Mathias & Fuest, Clemens & Peichl, Andreas, 2012. "Fiscal Union in Europe? Efficiency, Equity and Stabilizing Effects of an EU-Wide Income Tax," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 66063, Verein für Socialpolitik / German Economic Association.

    More about this item

    JEL classification:

    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • F15 - International Economics - - Trade - - - Economic Integration
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G01 - Financial Economics - - General - - - Financial Crises


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