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Economic Integration and Political Accountability

This paper studies to what extent economic integration, or globalization, influences the accountability of politicians, In a framework the politicians are only controled through reelection rules, we study the effect of economic integration on the reelection rules chosen by the voters and try to establish a link between economic integration and accountability. We first define economic integration noe only by the existence of externalities between countries but also by the positive correlation of shocks accross the countries. Then, from a political point of view, we show that economic integration is a two-sided phenomenon. On the one hand, the correlation of shocks allows yardstick comparison which is good for the control of politicians. On the other hand, it induces a lack of responsability because of the existence of externalities. Therefore, the political effect of economic integration depends on the relative strength of those two effects.

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Paper provided by Toulouse - GREMAQ in its series Papers with number 00-540.

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Length: 30 pages
Date of creation: 2000
Date of revision:
Handle: RePEc:fth:gremaq:00-540
Contact details of provider: Postal: GREMAQ, Universite de Toulouse I Place Anatole France 31042 - Toulouse CEDEX France.
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  1. Robert C. Feenstra, . "Integration Of Trade And Disintegration Of Production In The Global Economy," Department of Economics 98-06, California Davis - Department of Economics.
  2. Banks, Jeffrey S. & Sundaram, Rangarajan K., 1998. "Optimal Retention in Agency Problems," Journal of Economic Theory, Elsevier, vol. 82(2), pages 293-323, October.
  3. John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
  4. Dani Rodrik, 1998. "Symposium on Globalization in Perspective: An Introduction," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 3-8, Fall.
  5. repec:tpr:qjecon:v:116:y:2001:i:2:p:421-445 is not listed on IDEAS
  6. Sharun Mukand, 1999. "Globalization and the "Confidence Game"," Discussion Papers Series, Department of Economics, Tufts University 9924, Department of Economics, Tufts University.
  7. Giancarlo Corsetti & Paolo Pesenti, 1997. "Welfare and Macroeconomic Interdependence," NBER Working Papers 6307, National Bureau of Economic Research, Inc.
  8. Mookherjee, Dilip, 1984. "Optimal Incentive Schemes with Many Agents," Review of Economic Studies, Wiley Blackwell, vol. 51(3), pages 433-46, July.
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