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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/26121
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| Title: | | Gradualism and uncertainty in international union formation  |
| Authors: | | Konstantinidis, Nikitas |
| Issue Date: | | 2007 |
| Series/Report no.: | | CESifo working paper 2076 |
| Abstract: | | This paper introduces a new theoretical framework of international unions qua coalitions of countries adopting a common policy and common supranational institutions. We introduce a general class of non-cooperative spatial bargaining games of coalition formation among three countries in order to examine the endogenous strategic considerations in the creation and enlargement of international unions. Why would we observe a gradualist approach in the formation of the grand coalition even if the latter is assumed to be weakly efficient? We propose uncertainty about the benefits of integration as a mechanism that can generate gradual union formation in equilibrium. As it turns out, it may well be in the core countries interest to delay the accession of a third, peripheral country in order to i) stack the institutional make-up of the initial union in their favor and ii) signal their high resolve to wait out the expansion of their bilateral subunion. A related case from the European Union provides an interesting illustration. |
| JEL: | | F53 C72 D82 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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