We model an international union as a group of countries deciding together on the provision of public goods or policies that generate spillovers across members. The trade-off between benefits of coordination and loss of independent policy-making endogenously determines size, composition and scope of the union. Policy uniformity reduces the union’s size, may block enlargement processes and induce excessive centralization. We study flexible rules with non-uniform policies that reduce these inefficiencies focusing on arrangements relevant in the context of existing unions or federal states, like enhanced cooperation, subsidiarity, federal mandates and earmarked grants.
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- 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.
- Wacziarg, Romain & Alesina, Alberto, 1999. "Is Europe Going Too Far?," Scholarly Articles 4553012, Harvard University Department of Economics.
- Alberto Alesina & Romain Wacziarg, 1999. "Is Europe Going Too Far?," NBER Working Papers 6883, National Bureau of Economic Research, Inc.
- Alberto Alesina & Ignazio Angeloni & Federico Etro, 2001. "Institutional Rules for Federations," Harvard Institute of Economic Research Working Papers 1940, Harvard - Institute of Economic Research.
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