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One Market, One Law: EU Enlargement in light of the economic theory of optimal legal areas

Author

Listed:
  • Schmidtchen, Dieter
  • Neunzig, Alexander R.
  • Schmidt-Trenz, Hans-Jörg

Abstract

Drawing on a new analytical framework provided by the economic theory of optimal legal areas, this paper identifies the factors determining the optimal size of the European Union. It applies this theory to the question of how enlargement affects the welfare of the current and the new members of the European Union as well as that of the non-qualified countries. A welfare analysis reveals that enlargement can be a pareto-superior move. But, it also shows that enlargement can impose a negative externality on those countries left behind. In this case the results of a Kaldor-Hicks test are mixed. Furthermore, it is shown that the enlargement decision of the Union is unlikely to maximize overall welfare.

Suggested Citation

  • Schmidtchen, Dieter & Neunzig, Alexander R. & Schmidt-Trenz, Hans-Jörg, 2001. "One Market, One Law: EU Enlargement in light of the economic theory of optimal legal areas," CSLE Discussion Paper Series 2001-03, Saarland University, CSLE - Center for the Study of Law and Economics.
  • Handle: RePEc:zbw:csledp:200103
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    References listed on IDEAS

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    5. Jorgen Mortensen & Sandor Richter, 2000. "Measurement of Costs and Benefits of Accession to the European Union for Selected Countries in Central and Eastern Europe," wiiw Research Reports 263, The Vienna Institute for International Economic Studies, wiiw.
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    More about this item

    Keywords

    enlargement of the European Union; approximation of law; optimal legal areas;

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • F15 - International Economics - - Trade - - - Economic Integration
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • P33 - Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law

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