IDEAS home Printed from
   My bibliography  Save this article

To Wait or Not to Wait: Swiss EU-Membership as an Investment under Uncertainty


  • Beat Spirig
  • Rolf Weder


Why do some countries join the EU earlier than others, why do others wait? In order to answer this question we apply the theory of investment under uncertainty (Dixit and Pindyck, 1994) to the decision on EU-membership. We develop a simplified model of two periods to study how the value of waiting depends among other things on the degree of uncertainty. The results give rise to a country?s position to deliberately postpone a membership in order to keep the option to join later if this is desirable. After interpreting the results we illustrate the framework by applying it to Switzerland and the new EU-members, taking into account the EU?s draft of the Constitutional Treaty. We argue that the approach provides interesting insights regarding EU-membership, in general, and the Swiss position, in particular.

Suggested Citation

  • Beat Spirig & Rolf Weder, 2008. "To Wait or Not to Wait: Swiss EU-Membership as an Investment under Uncertainty," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 144(I), pages 85-114, March.
  • Handle: RePEc:ses:arsjes:2008-i-4

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2002. "The Regulation of Entry," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 1-37.
    2. Mathias Dewatripont & Francesco Giavazzi & Jürgen von Hagen & Ian Harden & Didier Baudewyns & Gérard Roland & Howard Rosenthal & André Sapir & Guido Tabellini, 1995. "Flexible integration: towards a more effective and democratic Europe," ULB Institutional Repository 2013/9541, ULB -- Universite Libre de Bruxelles.
    3. Andreas M. Fischer & Thomas J. Jordan & Caesar P. Lack, 2002. "Giving Up the Swiss Franc:Some Considerations on Seigniorage Flows under EMU," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 138(I), pages 61-82, March.
    4. Roland Vaubel, 1996. "Constitutional safeguards against centralization in federal states: An international cross-section analysis," Constitutional Political Economy, Springer, vol. 7(2), pages 79-102, June.
    5. Dewatripont, Mathias & Roland, Gerard, 1995. "The Design of Reform Packages under Uncertainty," American Economic Review, American Economic Association, vol. 85(5), pages 1207-1223, December.
    6. Djankov, Simeon & Glaeser, Edward & La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei, 2003. "The new comparative economics," Journal of Comparative Economics, Elsevier, vol. 31(4), pages 595-619, December.
    7. Alberto Alesina & Ignazio Angeloni & Ludger Schuknecht, 2005. "What does the European Union do?," Public Choice, Springer, vol. 123(3), pages 275-319, June.
    8. Heikki Kauppi & Mika Widgrén, 2004. "What determines EU decision making? Needs, power or both?," Economic Policy, CEPR;CES;MSH, vol. 19(39), pages 221-266, July.
    9. Tsebelis, George & Garrett, Geoffrey, 1996. "Agenda setting power, power indices, and decision making in the European Union," International Review of Law and Economics, Elsevier, vol. 16(3), pages 345-361, September.
    10. repec:hrv:faseco:30747190 is not listed on IDEAS
    11. Vaubel, Roland, 1994. "The Political Economy of Centralization and the European Community," Public Choice, Springer, vol. 81(1-2), pages 151-190, October.
    12. Frey, Bruno S, 1994. "Direct Democracy: Politico-economic Lessons from Swiss Experience," American Economic Review, American Economic Association, vol. 84(2), pages 338-342, May.
    13. Eichenberger, Reiner, 1994. "The Benefits of Federalism and the Risk of Overcentralization," Kyklos, Wiley Blackwell, vol. 47(3), pages 403-420.
    14. Haubrich, Joseph G. & Ritter, Joseph A., 2004. "Committing and reneging: A dynamic model of policy regimes," International Review of Economics & Finance, Elsevier, vol. 13(1), pages 1-18.
    15. Alesina, Alberto & Wacziarg, Romain, 1999. "Is Europe going too far?," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 51(1), pages 1-42, December.
    16. Baldwin, Richard & Widgrén, Mika, 2004. "Winners and Losers Under Various Dual Majority Rules for the EU Council of Ministers," CEPR Discussion Papers 4450, C.E.P.R. Discussion Papers.
    17. Manfred Holler & Mika Widgrén, 1999. "Why Power Indices for Assessing European Union Decision-Making?," Journal of Theoretical Politics, , vol. 11(3), pages 321-330, July.
    18. Robert McDonald & Daniel Siegel, 1986. "The Value of Waiting to Invest," The Quarterly Journal of Economics, Oxford University Press, vol. 101(4), pages 707-727.
    19. Sapir, Andre, 2001. "Domino effects in Western European regional trade, 1960-1992," European Journal of Political Economy, Elsevier, vol. 17(2), pages 377-388, June.
    20. Vaubel, Roland, 1997. "The constitutional reform of the European Union," European Economic Review, Elsevier, vol. 41(3-5), pages 443-450, April.
    21. Baldwin, Richard & Widgrén, Mika, 2005. "The Impact of Turkey's Membership on EU Voting," CEPR Discussion Papers 4954, C.E.P.R. Discussion Papers.
    22. Vaubel, Roland, 1994. "The public choice analysis of European integration: A survey," European Journal of Political Economy, Elsevier, vol. 10(1), pages 227-249, May.
    Full references (including those not matched with items on IDEAS)

    More about this item


    European integration; investment under uncertainty; EU-membership;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • F02 - International Economics - - General - - - International Economic Order and Integration


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ses:arsjes:2008-i-4. See general 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: (Peter Steiner). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.