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Asylum Seekers in Europe: The Warm Glow of a Hot Potato

  • Giovanni Facchini

    (University of Illinois and University of Milan)

  • Oliver Lorz

    (RWTH Aachen University)

  • Gerald Willmann

    (University of Kiel)

The Common European Asylum System calls for increased coordination of the EU countries’ policies towards asylum seekers and refugees. In this paper, we provide a formal analysis of the effects of coordination, explicitly modelling the democratic process through which policy is determined. In a symmetric, two-country citizen-candidate setup, in which accepting asylum seekers in one country generates a cross-border externality in the other, we show that coordination is desirable. Internalizing the externality leads to a welfare improvement over the non–cooperative outcome. However, contrary to suggestions by many observers, we show that allowing for cross-country transfers in the cooperative outcome leads to a welfare inferior outcome because the possibility of compensation exacerbates strategic delegation effects.

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Paper provided by Centro Studi Luca d\'Agliano, University of Milano in its series Development Working Papers with number 205.

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Date of creation: 15 Jun 2005
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Handle: RePEc:csl:devewp:205
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  1. Boeri, Tito & Hanson, Gordon H. & McCormick, Barry (ed.), 2002. "Immigration Policy and the Welfare System: A Report for the Fondazione Rodolfo Debenedetti," OUP Catalogue, Oxford University Press, number 9780199256310.
  2. Timothy J. Hatton, 2004. "Seeking asylum in Europe," Economic Policy, CEPR;CES;MSH, vol. 19(38), pages 5-62, 04.
  3. Lorz, Oliver & Willmann, Gerald, 2005. "On the endogenous allocation of decision powers in federal structures," Journal of Urban Economics, Elsevier, vol. 57(2), pages 242-257, March.
  4. Segendorff, Bjorn, 1998. "Delegation and Threat in Bargaining," Games and Economic Behavior, Elsevier, vol. 23(2), pages 266-283, May.
  5. Besley, Timothy & Coate, Stephen, 2003. "Centralized versus decentralized provision of local public goods: a political economy approach," Journal of Public Economics, Elsevier, vol. 87(12), pages 2611-2637, December.
  6. Tim Besley & Stephen Coate, . "An Economic Model of Representative Democracy," Penn CARESS Working Papers ecf70d639d700dba5327ab0c8, Penn Economics Department.
  7. Martin J. Osborne & Al Slivinksi, 1995. "A Model of Political Competition with Citizen-Candidates," Department of Economics Working Papers 1995-01, McMaster University.
  8. Willmann, Gerald, 2003. "Why Legislators are Protectionists: the Role of Majoritarian Voting in Setting Tariffs," Economics Working Papers 2003,10, Christian-Albrechts-University of Kiel, Department of Economics.
  9. Hatton, Timothy J. & Williamson, Jeffrey G, 2005. "Refugees, Asylum Seekers and Policy in Europe," CEPR Discussion Papers 5058, C.E.P.R. Discussion Papers.
  10. John Douglas Wilson, 1990. "Are Efficiency Improvements In Government Transfer Policies Self-Defeating In Political Equilibrium?," Economics and Politics, Wiley Blackwell, vol. 2(3), pages 241-258, November.
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