Norwegian Rhapsody? The Political Economy Benefits of Regional Integration

47 Pages Posted: 4 Sep 2015

See all articles by Nauro F. Campos

Nauro F. Campos

University College London; University of Michigan at Ann Arbor - The William Davidson Institute; IZA Institute of Labor Economics

Fabrizio Coricelli

University of Siena - Department of Political and International Sciences ; Paris School of Economics (PSE); Centre for Economic Policy Research (CEPR)

Luigi Moretti

University of Padua - Department of Economics and Management

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Abstract

This paper investigates whether joint economic and political integration leads to larger economic benefits than just economic integration. The identification strategy rests on the fact that Norway, at the time of the 1995 Enlargement of the European Union (EU), had successfully completed negotiations and fulfilled all accession requirements, taken membership in the European Economic Area (with full access to the Single Market), but decided in a referendum to reject full-fledged EU membership. Using the differences-in-differences and synthetic control methods with regional data, we find substantial politically driven economic benefits from EU membership: if Norway had joined the EU in 1995, productivity levels between 1995 and 2001 would have been 6% higher on average.

Keywords: political economy benefits, European Union, labor productivity, synthetic counterfactual method, regional data

JEL Classification: C33, F15, F43, O52

Suggested Citation

Campos, Nauro F. and Coricelli, Fabrizio and Moretti, Luigi, Norwegian Rhapsody? The Political Economy Benefits of Regional Integration. IZA Discussion Paper No. 9098, Available at SSRN: https://ssrn.com/abstract=2655046

Nauro F. Campos (Contact Author)

University College London ( email )

Gower Street
London, WC1E 6BT
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University of Michigan at Ann Arbor - The William Davidson Institute

724 E. University Ave.
Wyly Hall
Ann Arbor, MI 48109-1234
United States

IZA Institute of Labor Economics

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Bonn, D-53072
Germany

Fabrizio Coricelli

University of Siena - Department of Political and International Sciences ( email )

Via Mattioli, 10
Siena, 53100
Italy

Paris School of Economics (PSE)

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Paris, 75014 75014
France

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Luigi Moretti

University of Padua - Department of Economics and Management ( email )

Via del Santo, 33
Padova, 35123
Italy

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