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International Unions

  • Alberto Alesina
  • Ignazio Angeloni
  • Federico Etro

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 policymaking 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 ine?- ciencies 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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File URL: http://www.economics.harvard.edu/pub/hier/2003/HIER2001.pdf
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Paper provided by Harvard - Institute of Economic Research in its series Harvard Institute of Economic Research Working Papers with number 2001.

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Date of creation: 2003
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Handle: RePEc:fth:harver:2001
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Web page: http://www.economics.harvard.edu/journals/hier

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  1. Wacziarg, Romain & Alesina, Alberto, 1999. "Is Europe Going Too Far?," Scholarly Articles 4553012, Harvard University Department of Economics.
  2. 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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