A Positive Explanation of EU Enlargement

Models of international unions suggest that large and rich countries reap little economic benefits from political integration with smaller and poorer countries. This paper challenges this view by presenting a formal study of economic influence by special interest groups in an international union. We first show that countries where more groups are organized to lobby gain from political integration on economic grounds. The reason is that a more organized country, under a political union, can affect policies in the other country to its advantage, something that a less organized country can do to a lesser extent. We then argue that richer countries will tend to have more organized interest groups before political integration and show that this will continue to be the case afterward. Hence, the model implies that there are costs and benefits of EU Enlargement to Eastern Europe in addition to those suggested by the existing literature.