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Title:The political economy of regional integration projects at borders where rich and poor meet: the role of cross-border shopping and community sorting PDF Logo
Authors:Dascher, Kristof
Haupt, Alexander
Issue Date:2008
Series/Report no.:CESifo working paper 2280
Abstract:At borders where rich and poor countries meet, services prices differ hugely. In principle, price differentials could be exploited to mutual benefit, offering improved job opportunities to the poor as well as better shopping opportunities to the rich. However, cross-border shopping is often limited by the substantial transaction costs of crossing the border. Moreover, local governments frequently fail to cut these transaction costs even where they have the opportunity to do so. In this paper, we show (i) why a majority of the local electorate often backs this outcome, (ii) how intra-country mobility affects local policy, and (iii) how (inter-) national regulations shape local decisions.
Subjects:cross-border shopping
community sorting
regional integration
voting
federalism
JEL:F15
H7
R2
D72
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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