Abstract
The European integration process started with the aim of reducing the differences in income and/or living standards between the participating countries over time. To achieve this, a certain alignment of institutions and structures was seen as a necessary precondition. While the goal of this income and institutional convergence was successfully achieved over a long period of time, this convergence development has weakened or even turned into divergence in the last one to two decades. This paper provides an overview of the empirical evidence for these convergence and divergence developments and develops policy implications (the challenges and possible ways out).
Highlights
Introduction in the European Integration ProcessIt is conventional wisdom that the larger and more complex a project is, the greater the risk that it will fail
The assumption of institutional convergence as a prerequisite or, respectively, as a consequence of European integration is examined in more detail before the empirical experience with this institutional con/divergence process is presented and explained
We refer to the new econometric techniques and methods of recent empirical studies on institutional convergence, which increasingly focus on club convergence
Summary
It is conventional wisdom that the larger and more complex a project is, the greater the risk that it will fail. More and more extensions were made (in terms of scope, and in terms of areas of application/depth), so that it has become increasingly difficult and complex to keep the situation/project stable/sustainable. This made it more difficult to achieve the goal of real (including institutional) convergence, which was emphasized as early as 1957 in the EEC. The assumption of institutional convergence as a prerequisite or, respectively, as a consequence of European integration is examined in more detail before the empirical experience with this institutional con/divergence process (especially the results of econometric studies) is presented and explained.
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