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The Zollverein and the Formation of a Customs Union

  • Florian Ploeckl

    ()

    (Department of Economics and Nuffield College, University of Oxford)

The Zollverein, the German customs union of 1834, was the institutional centrepiece of Germany’s economic unification. A bargaining model is applied to analyze the structure of its negotiation process and accession sequence. The existence of negative coalition externalities, the effect of a coalition on non-participants, led Prussia to choose sequential over multilateral negotiations. The nature of these externalities within the areas of financial revenues, trade policy and domestic political economy also explains the observed accession sequence. The choice of a customs union as institutional structure allowed Prussia to extract higher concessions from other states due to stronger coalition externalities.

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File URL: http://www.economics.ox.ac.uk/materials/papers/4430/ploeckl84.pdf
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Paper provided by Economics Group, Nuffield College, University of Oxford in its series Oxford University Economic and Social History Series with number _084.

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Length: 40 pages
Date of creation: 20 Aug 2010
Date of revision:
Handle: RePEc:nuf:esohwp:_084
Contact details of provider: Web page: http://www.nuff.ox.ac.uk/economics/

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  1. Baldwin, Richard, 1993. "A Domino Theory of Regionalism," CEPR Discussion Papers 857, C.E.P.R. Discussion Papers.
  2. Jan Luiten van Zanden & Arthur van Riel, 2004. "Introduction to The Strictures of Inheritance: The Dutch Economy in the Nineteenth Century
    [The Strictures of Inheritance: The Dutch Economy in the Nineteenth Century]
    ," Introductory Chapters, Princeton University Press.
  3. Helpman, Elhanan & Antras, Pol & Aghion, Philippe, 2007. "Negotiating Free Trade," Scholarly Articles 3351239, Harvard University Department of Economics.
  4. Florian Ploeckl, 2008. "Borders, Market Size and Urban Growth, The Case of Saxon Towns and the Zollverein in the 19th Century," Working Papers 966, Economic Growth Center, Yale University.
  5. Shiue, Carol H., 2005. "From political fragmentation towards a customs union: Border effects of the German Zollverein, 1815 to 1855," European Review of Economic History, Cambridge University Press, vol. 9(02), pages 129-162, August.
  6. Ploeckl, Florian, 2008. "Borders, Market Size and Urban Growth, The Case of Saxon Towns and the Zollverein in the 19th Century," Working Papers 55, Yale University, Department of Economics.
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