The Leverage of the Small Ones in the EU
In the early 1970s, E.F. Schumacher criticised western industrial countries in the face of emerging globalisation by using a term generated by Leopold Kohr: "Small is beautiful." Seen against the progressing enlargement of the EU we need to ask whether and to what extent small is still beautiful. The internal market promises the greatest integration benefits from utilising economies of scale. In line with the integration theory, large economies (and their large-scale businesses) should profit more from a deeper European integration than would smaller ones. But is the size of an economy within the EU really of importance? While the original EU 6 was made up of equally sized countries, today's EU 28 is highly unequal: seven large and medium-sized countries face 21 small ones. While politics is still dominated by the major countries (including in the Council), especially along the historical Berlin-Paris axis, the situation is mixed when we look at the economic side, corresponding widely to Rose's (2006) estimate in searching for a "national scale effect". The adage that size does not matter applies to the EU countries as well. Smaller economies are more open to foreign trade than large ones (and should thus profit more from free access to the internal market), but otherwise do not differ in a systematic manner. Size does not make them rich. Their growth performance does not depend on a country's size, but rather on the period of investigation and the phase of integration.
|Date of creation:||08 Aug 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (+43 1) 798 26 01-0
Fax: (+43 1) 798 93 86
Web page: http://www.wifo.ac.at/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rose, Andrew K, 2005.
"Size Really Doesn't Matter: In Search of a National Scale Effect,"
CEPR Discussion Papers
5350, C.E.P.R. Discussion Papers.
- Rose, Andrew K., 2006. "Size really doesn't matter: In search of a national scale effect," Journal of the Japanese and International Economies, Elsevier, vol. 20(4), pages 482-507, December.
- Alejandro Micco & Ernesto H. Stein & Guillermo Luis Ordoñez, 2003.
"The Currency Union Effect on Trade: Early Evidence from EMU,"
Research Department Publications
4339, Inter-American Development Bank, Research Department.
- Alejandro Micco & Ernesto Stein & Guillermo OrdoÒez, 2003. "The currency union effect on trade: early evidence from EMU," Economic Policy, CEPR;CES;MSH, vol. 18(37), pages 315-356, October.
- Alejandro Micco & Ernesto H. Stein & Guillermo Luis Ordoñez, 2003. "The Currency Union Effect on Trade: Early Evidence from EMU," IDB Publications (Working Papers) 6511, Inter-American Development Bank.
- Harald Badinger & Fritz Breuss, 2009. "Country size and the trade effects of the euro," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 145(2), pages 207-223, July.
- Harald Badinger & Fritz Breuss, 2006. "Country Size and the Gains from Trade Bloc Enlargement: an Empirical Assessment for the European Community," Review of International Economics, Wiley Blackwell, vol. 14(4), pages 615-631, 09.
- Robert J. Barro, 2012.
"Inflation and Economic Growth,"
CEMA Working Papers
568, China Economics and Management Academy, Central University of Finance and Economics.
- Sapir, Andre, 2001. "Domino effects in Western European regional trade, 1960-1992," European Journal of Political Economy, Elsevier, vol. 17(2), pages 377-388, June.
- Casella, Alessandra, 1996.
"Large countries, small countries and the enlargement of trade blocs,"
European Economic Review,
Elsevier, vol. 40(2), pages 389-415, February.
- Alessandra Casella, 1995. "Large Countries, Small Countries, and the Enlargement of Trade Blocs," NBER Working Papers 5365, National Bureau of Economic Research, Inc.
- Casella, Alessandra, 1996. "Large Countries, Small Countries and the Enlargement of Trade Blocs," CEPR Discussion Papers 1320, C.E.P.R. Discussion Papers.
- Wipo, 2013. "Global Innovation Index 2013: Local Dynamics Key to Overcoming Global Innovation Divide," WIPO Economics & Statistics Series, World Intellectual Property Organization - Economics and Statistics Division, number 2013:gii, April.
- Eloi Lauren, 2008. "Economic consequences of the size of nations, 50 years on," Documents de Travail de l'OFCE 2008-26, Observatoire Francais des Conjonctures Economiques (OFCE).
- Grossman, G.M. & Helpman, E., 1992.
"Protection for Sale,"
21-92, Tel Aviv.
- Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers 162, Princeton, Woodrow Wilson School - Public and International Affairs.
- Grossman, Gene & Helpman, Elhanan, 1993. "Protection for Sale," CEPR Discussion Papers 827, C.E.P.R. Discussion Papers.
- Gene M. Grossman & Elhanan Helpman, 1992. "Protection For Sale," NBER Working Papers 4149, National Bureau of Economic Research, Inc.
- Fritz Breuss, 2013. "Effekte der österreichischen EU-Mitgliedschaft," FIW Policy Brief series 018, FIW.
- Harald Badinger, 2012. "Die Auswirkungen des Euro auf den Außenhandel der EU und Österreichs," FIW Policy Brief series 015, FIW.
- repec:cup:cbooks:9780521481342 is not listed on IDEAS
- Karl Aiginger, 2011. "Why Performance Differed Across Countries in the Recent Crisis. How Country Performance in the Recent Crisis Depended on Pre-crisis Conditions," WIFO Working Papers 387, WIFO.
- Richard Baldwin, 1993.
"A Domino Theory of Regionalism,"
NBER Working Papers
4465, National Bureau of Economic Research, Inc.
- Andrew K. Rose, 2006. "Size Really Doesn't Matter: In Search of a National Scale Effect," NBER Working Papers 12191, National Bureau of Economic Research, Inc.
- Jason Barr & Francesco Passarelli, .
"Who Has the Power in the EU?,"
Working Papers Rutgers University, Newark
2004-005, Department of Economics, Rutgers University, Newark.
- Eloi Laurent, 2008. "Economic consequences of the size of nations, 50 years on," Sciences Po publications 2008-26, Sciences Po.
- Marc J. Melitz, 2003.
"The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity,"
Econometric Society, vol. 71(6), pages 1695-1725, November.
- Mark J. Melitz, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," NBER Working Papers 8881, National Bureau of Economic Research, Inc.
- Melitz, Marc J, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," CEPR Discussion Papers 3381, C.E.P.R. Discussion Papers.
- Hogrefe, Jan & Jung, Benjamin & Kohler, Wilhelm K., 2012. "Putting currency misalignment into gravity: The currency union effect reconsidered," University of Tuebingen Working Papers in Economics and Finance 32, University of Tuebingen, Faculty of Economics and Social Sciences.
- Baldwin, Richard, 2007. "Trade Effects of the Euro: a Comparison of Estimators," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 22, pages 780-818.
- Jean Pisani-Ferry & AndrÃ© Sapir & Guntram B. Wolff, . "EU-IMF assistance to euro area countries: an early assessment," Blueprints, Bruegel, number 779.
- Harald Badinger, 2005. "Growth Effects of Economic Integration: Evidence from the EU Member States," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 141(1), pages 50-78, April.
- Nikolaos Antonakakis & Harald Badinger & Wolf Heinrich Reuter, 2014. "From Rome to Lisbon and Beyond: Member States' Power, Efficiency, and Proportionality in the EU Council of Ministers," Department of Economics Working Papers wuwp175, Vienna University of Economics and Business, Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:wfo:wpaper:y:2013:i:452. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ilse Schulz)
If references are entirely missing, you can add them using this form.