EU enlargement and theories of economic integration

The fifth wave of EU enlargement taking place in 2004 and 2007 was the culmination of a long process beginning in 1989. Early on the Central and Eastern Europe countries began requesting membership, taking the then European Community by surprise. Only slowly during the 1990s were criteria for accession drawn up and empirical studies of the likely effects of enlargement began to emerge. The theoretical basis for analysis of the enlargement process was heterogeneous and piecemeal, and it is difficult to talk of ‘enlargement theory’. None the less the aim here is to indicate the main theoretical approaches used to study the fifth wave of enlargement. A strand of integration theory relies on the seminal work of Balassa to synthesize this process into ‘stages’ or grades of integration: a free trade area; a customs union; a single market (with the four freedoms of movement of goods, services, capital and labour); economic and monetary union; and political union. Though these stages do not constitute clearly defined steps in an ascending scale, as will be shown here, they are reflected in the evolution of ‘enlargement theory’. The paper illustrates that economic theories of enlargement and those dealing with more general aspects of European integration have at times developed in parallel, with spillovers occurring in both directions, but in other cases they have taken rather diverging routes.