The Political Economy of EU Enlargement: Or, Why Japan is not a Candidate Country?

Antonis Adam () and Thomas Moutos ()

No CESifo Working Paper No. 704, CESifo Working Paper Series from CESifo Group Munich

Abstract: In this paper we argue that strong political economy forces explain the rush of the EU to expand eastwards. We use a model of vertical product differentiation in order to claim that technologically- advanced EU firms (residing in high-income member countries) prefer a mutual market-opening with less technologically sophisticated countries than multilateral liberalization, which would necessarily involve the reciprocal opening of markets with other technologically-advanced countries. By the same token, less technologically sophisticated firms residing in low-income member countries would prefer an enlargement that is directed towards high-income countries. The evidence presented in the paper supports our hypothesis.

Keywords: EU enlargement; vertically differentiated products; political economy; customs unions (search for similar items in EconPapers)
JEL-codes: D70 F13 F15 (search for similar items in EconPapers)
Date: 2002
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