Institutional Integration and Economic Growth
Posted: 28 Sep 2020
Date Written: 2019
The literature on the growth effects of European integration remains inconclusive. This is due to severe methodological difficulties mostly driven by country heterogeneity. This paper addresses these concerns using the synthetic control method. It constructs counterfactuals for countries that joined the European Union (EU) from 1973 to 2004. We find that growth effects from EU membership are large and positive, with Greece as the exception. Despite substantial variation across countries and over time, we estimate that without European integration, per capita incomes would have been, on average, approximately 10% lower in the first ten years after joining the EU.
Keywords: Economic Growth, Integration Institutions, European Union, Synthetic Control Method
JEL Classification: C33, F15, N14, N44, O52
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