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Volume 52, September/October 2017, Number 5 · pp. 315-322

Articles

The Political Limits of Economic Integration

Phedon A. Nicolaides, Joanna Hornik

Economic integration can be beneficial for all participating countries. But after a point, further gains from integration can be achieved only by trading off costs in one policy or sector against benefits in another. In this article we explore the relationship between these trade-offs and their political sustainability. We conjecture that a viable policy is politically sustainable when its benefits to citizens are visible to them. In the longer term, the trade-offs which are required to deepen integration become invisible, at which point reversing the process of integration appears to be in the national interest. We conclude that integration needs to be supported with domestic policies that mitigate the costs of integration borne by some groups or sectors.

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This Intereconomics article is available for free at this page after an embargo period of two years. Reading it before October 2019 is possible via SpringerLink or in the next library.