Sequencing of Club Enlargement: "big bang," "gradualism," and internal reform
In an incomplete contract framework, I analyse how a club chooses its enlargement strategy in the presence of congestion. The club faces two waves of applicants. The applicants are homogeneous within each wave but differ in their conformity to the club's standards across waves. For each wave, the club chooses between an early entry offer, when the club can enforce the applicant's reform, and a late entry offer, when the applicant has to reform itself in order to be admitted. In addition, the club undertakes its own internal reform which, if successful, can eliminate congestion. I show that the club uses the "gradualism" approach (admitting waves sequentially) when the waves substantially differ in their compliance with the club's standards, and the "big bang" approach (admitting waves simultaneously) otherwise. Moreover, the club never admits a less advanced wave before a more advanced one.
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- 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;CES;MSH, vol. 12(24), pages 125-176, 04.
- Jorgen Mortensen & Sandor Richter, 2000. "Measurement of Costs and Benefits of Accession to the European Union for Selected Countries in Central and Eastern Europe," wiiw Research Reports 263, The Vienna Institute for International Economic Studies, wiiw.
- Klaus Wallner & Mike Burkart, 2000.
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- Mike Burkart & Klaus Wallner, 2000. "Club Enlargement: Early Versus Late Admittance," Econometric Society World Congress 2000 Contributed Papers 0253, Econometric Society.
- Burkart, Mike & Wallner, Klaus, 2000. "Club Enlargement: Early Versus Late Admittance," CEPR Discussion Papers 2600, C.E.P.R. Discussion Papers.
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