Small States, Micro States, and their International Negotiation and Migration

Maurice Schiff

Journal of Economic Integration, 2014, vol. 29, 430-449

Abstract: Due to low bargaining power and scarce resources, small developing states face severe disadvantages in international negotiations and may benefit from bloc formation and intra-bloc migration. Policies are examined in a model where a bloc’s size and welfare impact are determined by international and regional negotiation costs, bargaining power, accession rule, and intra-bloc migration. The main findings are: (i) bloc formation likelihood, size, and benefit increase with international negotiation costs; (ii) intra-bloc migration acts as a public good, raising regional benefits; (iii) bloc size is optimal in the presence of accession fees; (iv) intra-bloc migration and North-South trade are complements under negotiations for increased market access. Thus, even if trading identical goods, small neighboring states should consider forming an international negotiating bloc and supporting intra-bloc migration.

Keywords: Small States; International; Negotiations; Regional; Cooperation; South-South Migration; Bloc Size; Welfare (search for similar items in EconPapers)
JEL-codes: F11 F15 F22 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0635

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