Political and economic logic of western european integration A study of convergence comparing member and non-member states, 1980–98

Abstract

One of the few cross-national studies, which contrast members of the EU with a comparable set of other countries as benchmark, suggested that membership is beneficial for economic growth and may cause faster economic convergence of less wealthy EU member states. Employing a newly collected data set on inter-state transfers in the EU, we test whether this faster economic con­vergence is due to access to the Internal Market (proposition of the economic logic) or ra­ther a consequence of special forms of inter-state redistribution within the EU (proposition of the political logic). We find that if EU countries grew faster in the 1980s and 1990s (as com­pared to the benchmark and controlling for relevant growth factors), then this was due to transfers within the community. These benefited the poorer EU countries, which thus expe­rien­­ced faster economic convergence. This evidence suggests support for the argument of the poli­tical logic regarding Western European integration which we contrast with the economic logic. The empirical results are highly significant regarding the prospects of catching up for new EU members in Central and Eastern Europe. The decisions about the future EU transfer system will determine the chances for convergence for these countries.