IDEAS home Printed from https://ideas.repec.org/a/vrs/ceuecj/v8y2021i55p126-143n1.html
   My bibliography  Save this article

Economic impact of the EU Eastern enlargement on New Member States revisited: The role of economic institutions

Author

Listed:
  • Hagemejer Jan

    (CASE Center for Social and Economic Research, University of Warsaw, Warszawa, Poland)

  • Michałek Jan J.
  • Svatko Pavel

    (University of Warsaw, Warszawa, Poland)

Abstract

The paper analyses the economic implications of the accession of New Member States (NMS) to the European Union (EU) in 2004 and 2007. The estimation effects of integration with the EU were carried out as a comparative case study using the synthetic control method (SCM) proposed by Abadie and Gardeazabal. Compared to previous studies analysing the effects of accession to the EU (Campos, Coricelli and Moretti), we check for the importance of the quality of economic institutions for the matching process of the analysed economies with their comparators. The results of the econometric analysis show a positive impact on the country performance 6 years and 12 years after accession to the EU. The gains from accession are large but not universal. For 5 of the 10 analysed countries the difference in levels of per capita gross domestic product (GDP) against the counterfactual is at least 30%.

Suggested Citation

  • Hagemejer Jan & Michałek Jan J. & Svatko Pavel, 2021. "Economic impact of the EU Eastern enlargement on New Member States revisited: The role of economic institutions," Central European Economic Journal, Sciendo, vol. 8(55), pages 126-143, January.
    • Handle: RePEc:vrs:ceuecj:v:8:y:2021:i:55:p:126-143:n:1
    DOI: 10.2478/ceej-2021-0008
    as

    Download full text from publisher

    File URL: https://doi.org/10.2478/ceej-2021-0008
    Download Restriction: no
    File URL: https://libkey.io/10.2478/ceej-2021-0008?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Firpo Sergio & Possebom Vitor, 2018. "Synthetic Control Method: Inference, Sensitivity Analysis and Confidence Sets," Journal of Causal Inference, De Gruyter, vol. 6(2), pages 1-26, September.
    2. Harald Badinger, 2005. "Growth Effects of Economic Integration: Evidence from the EU Member States," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(1), pages 50-78, April.
    3. Roland, Gerard & Verdier, Thierry, 2003. "Law enforcement and transition," European Economic Review, Elsevier, vol. 47(4), pages 669-685, August.
    4. Karla Hoff & Joseph E. Stiglitz, 2004. "After the Big Bang? Obstacles to the Emergence of the Rule of Law in Post-Communist Societies," American Economic Review, American Economic Association, vol. 94(3), pages 753-763, June.
    5. Jesus Crespo Cuaresma & Doris Ritzberger-Grunwald & Maria Antoinette Silgoner, 2008. "Growth, convergence and EU membership," Applied Economics, Taylor & Francis Journals, vol. 40(5), pages 643-656.
    6. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
    7. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472, Elsevier.
    8. 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," IZA Discussion Papers 8162, Institute of Labor Economics (IZA).
    9. Tim Haughton, 2007. "When Does the EU Make a Difference? Conditionality and the Accession Process in Central and Eastern Europe," Political Studies Review, Political Studies Association, vol. 5(2), pages 233-246, May.
    10. Campos, Nauro F. & Coricelli, Fabrizio & Moretti, Luigi, 2019. "Institutional integration and economic growth in Europe," Journal of Monetary Economics, Elsevier, vol. 103(C), pages 88-104.
    11. Nauro F. Campos & Abrizio Coricelli, 2002. "Growth in Transition: What We Know, What We Don't, and What We Should," Journal of Economic Literature, American Economic Association, vol. 40(3), pages 793-836, September.
    12. Fritz Breuss, 2001. "Macroeconomic Effects of EU Enlargement for Old and New Members," WIFO Working Papers 143, WIFO.
    13. Uwe Böwer & Alessandro Turrini, 2010. "EU Accession: A Road to Fast-track Convergence?," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 52(2), pages 181-205, June.
    14. Susan Athey & Guido W. Imbens, 2017. "The State of Applied Econometrics: Causality and Policy Evaluation," Journal of Economic Perspectives, American Economic Association, vol. 31(2), pages 3-32, Spring.
    15. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2011. "Synth: An R Package for Synthetic Control Methods in Comparative Case Studies," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 42(i13).
    16. Hüseyin Aytuğ & Merve Mavuş Kütük & Arif Oduncu & Sübidey Togan, 2017. "Twenty Years of the EU-Turkey Customs Union: A Synthetic Control Method Analysis," Journal of Common Market Studies, Wiley Blackwell, vol. 55(3), pages 419-431, May.
    17. Arjan M. Lejour & Ruud A. De Mooij & Richard Nahuis, 2001. "EU Enlargement: Economic Implications for Countries and Industries," CESifo Working Paper Series 585, CESifo.
    18. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    19. Scott L. Baier & Jeffrey H. Bergstrand & Peter Egger & Patrick A. McLaughlin, 2008. "Do Economic Integration Agreements Actually Work? Issues in Understanding the Causes and Consequences of the Growth of Regionalism," The World Economy, Wiley Blackwell, vol. 31(4), pages 461-497, April.
    20. Philippe Aghion, 2005. "Growth and Institutions," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 32(1), pages 3-18, March.
    21. Jan Hagemejer & Jakub Mućk, 2018. "Unraveling the economic performance of the CEEC countries. The role of exports and global value chains," NBP Working Papers 283, Narodowy Bank Polski.
    22. Alberto Abadie & Alexis Diamond & Jens Hainmueller, 2015. "Comparative Politics and the Synthetic Control Method," American Journal of Political Science, John Wiley & Sons, vol. 59(2), pages 495-510, February.
    23. Eichengreen, Barry & Boltho, Andrea, 2008. "The Economic Impact of European Integration," CEPR Discussion Papers 6820, C.E.P.R. Discussion Papers.
    24. Philippe Aghion & Steven Durlauf (ed.), 2005. "Handbook of Economic Growth," Handbook of Economic Growth, Elsevier, edition 1, volume 1, number 1.
    25. Richard E. Baldwin & Joseph F. Francois & Richard Portes, 1997. "The costs and benefits of eastern enlargement: the impact on the EU and central Europe," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 12(24), pages 125-176.
    26. Halkos, George E. & Tzeremes, Nickolaos G., 2009. "Economic efficiency and growth in the EU enlargement," Journal of Policy Modeling, Elsevier, vol. 31(6), pages 847-862, November.
    27. Coricelli, Fabrizio & Campos, Nauro & Moretti, Luigi, 2014. "Economic Growth and Political Integration: Estimating the Benefits from Membership in the European Union Using the Synthetic Co," CEPR Discussion Papers 9968, C.E.P.R. Discussion Papers.
    28. Arjan M. Lejour & Ruud A. De Mooij & Richard Nahuis, 2001. "EU Enlargement: Economic Implications for Countries and Industries," CESifo Working Paper Series 585, CESifo.
    29. Jan Hagemejer & Jakub Mućk, 2019. "Export‐led growth and its determinants: Evidence from Central and Eastern European countries," The World Economy, Wiley Blackwell, vol. 42(7), pages 1994-2025, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Campos, Nauro F. & Coricelli, Fabrizio & Moretti, Luigi, 2019. "Institutional integration and economic growth in Europe," Journal of Monetary Economics, Elsevier, vol. 103(C), pages 88-104.
    2. Chiara Natalie Focacci & Mitja Kovac & Rok Spruk, 2022. "The perils of Kremlin's influence: evidence from Ukraine," Papers 2206.04950, arXiv.org.
    3. Tomasz Serwach, 2023. "The European Union and within‐country income inequalities. The case of the new member states," The World Economy, Wiley Blackwell, vol. 46(7), pages 1890-1939, July.
    4. Tomasz Serwach, 2022. "The European Union and within-country income inequalities. The case of the New Member States," Working Papers hal-03548416, HAL.
    5. Ikeme, Sionegael & Han, Doo Bong, 2021. "The Impacts of the EU Integration on Food Production in Baltic Countries," 2021 Annual Meeting, August 1-3, Austin, Texas 313989, Agricultural and Applied Economics Association.
    6. Manuel Funke & Moritz Schularick & Christoph Trebesch, 2023. "Populist Leaders and the Economy," American Economic Review, American Economic Association, vol. 113(12), pages 3249-3288, December.
    7. Arjan Lejour & Vladimir Solanic & Paul Tang, 2009. "EU Accession and Income Growth: An Empirical Approach," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 16(1), pages 127-144, May.
    8. Dennis Essers & Stefaan Ide, 2017. "The IMF and precautionary lending : An empirical evaluation of the selectivity and effectiveness of the flexible credit line," Working Paper Research 323, National Bank of Belgium.
    9. Halmai, Péter, 2020. "A dezintegráció gazdaságtana. A brexit esete [The economics of disintegration. The case of Brexit]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 837-877.
    10. Klaudijo Klaser, 2020. "A Theory of Justice of John Rawls as Basis for European Fiscal Union," Review of Economics and Institutions, Università di Perugia, vol. 11(1-2).
    11. Essers, Dennis & Ide, Stefaan, 2019. "The IMF and precautionary lending: An empirical evaluation of the selectivity and effectiveness of the Flexible Credit Line," Journal of International Money and Finance, Elsevier, vol. 92(C), pages 25-61.
    12. Halmai, Péter, 2018. "Az európai növekedési modell kifulladása [Exhaustion of the European economic model]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 122-160.
    13. Alena Bachleitner, 2017. "Abolishing the Wealth Tax. A Case Study for Germany," WIFO Working Papers 545, WIFO.
    14. Jonne Lehtimäki & David Sondermann, 2022. "Baldwin versus Cecchini revisited: the growth impact of the European Single Market," Empirical Economics, Springer, vol. 63(2), pages 603-635, August.
    15. Sondermann, David & Lehtimäki, Jonne, 2020. "Baldwin vs. Cecchini revisited: the growth impact of the European Single Market," Working Paper Series 2392, European Central Bank.
    16. Katja Mann, 2015. "The EU, a Growth Engine? The Impact of European Integration on Economic Growth in Central Eastern Europe," FIW Working Paper series 136, FIW.
    17. Adam Pochmara & Jan Jakub Michałek, 2023. "The impact of the accession to the EU on trade flows of the Visegrad countries. Analysis based on the synthetic control method," Working Papers 2023-21, Faculty of Economic Sciences, University of Warsaw.
    18. Wilhelm Kohler & Christian Arndt & Anselm Mattes & Michael Knogler & Fidelis Lankes & Jarko Fidmuc, 2007. "The new EU members: Engine or retarders of European integration?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 60(14), pages 03-20, July.
    19. Bruno Ferman & Cristine Pinto & Vitor Possebom, 2020. "Cherry Picking with Synthetic Controls," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(2), pages 510-532, March.
    20. Maximiliano Marzetti & Rok Spruk, 2023. "Long-Term Economic Effects of Populist Legal Reforms: Evidence from Argentina," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 65(1), pages 60-95, March.

    More about this item

    Keywords

    EU enlargement; New Member States; synthetic control method;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies

    Statistics

    Access and download statistics

    Corrections

    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:vrs:ceuecj:v:8:y:2021:i:55:p:126-143:n:1. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.sciendo.com .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.