(Mis)Matches of Institutions: The EU and Varieties of Capitalism

Katja Kalkschmied and Joern Kleinert (joern.kleinert@uni-graz.at)

No 2019-01, Graz Economics Papers from University of Graz, Department of Economics

Abstract: We study the crisis of the EU by harnessing a supermodular game approach, which sees institutions as a self-sustaining bundle of rules of the game that are subject to manifold complementarities. Systems of institutions evolve over time and feature country-specific characteristics. EU integration alters the effectiveness of a set of complementary national institutions and can reduce welfare in Member States. The negative effects may be temporary if the national system of institutions changes towards a new, superior equilibrium. The strength and direction of the effects are country-specific and depend on: (i) the fit of the national system of institutions to the new environment, and (ii) the strength of complementarities among institutions. Based on our theoretic framework we assess the five scenarios brought forward in the White Paper on the future of Europe (European Commission, 2017), discuss the conditions under which each scenario works and reflect on them combining our theoretic framework with empirical insights from the Varieties of Capitalism literature.

Keywords: EU crisis; endogenous institutions; complementarities; heterogeneous national systems; market integration (search for similar items in EconPapers)
JEL-codes: C73 F15 F55 (search for similar items in EconPapers)
Date: 2019-01
New Economics Papers: this item is included in nep-eec
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://unipub.uni-graz.at/obvugrveroeff/download/ ... riginalFilename=true

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:grz:wpaper:2019-01

Ordering information: This working paper can be ordered from
https://repecgrz.uni-graz.at/RePEc/

Access Statistics for this paper

More papers in Graz Economics Papers from University of Graz, Department of Economics University of Graz, Universitaetsstr. 15/F4, 8010 Graz, Austria. Contact information at EDIRC.
Bibliographic data for series maintained by Stefan Borsky (stefan.borsky@uni-graz.at).