Asylum seekers in Europe: the warm glow of a hot potato |
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Authors: | Giovanni Facchini Oliver Lorz Gerald Willmann |
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Affiliation: | (1) Department of Economics, University of Illinois, 484 Wohlers Hall, MC-706, Champaign, 61820, IL, USA;(2) RWTH Aachen University, International Economics, Templergraben 64, 52056 Aachen, Germany;(3) Department of Economics, University of Kiel, 24098 Kiel, Germany |
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Abstract: | The Common European Asylum System calls for increased coordination of the European Union (EU) countries’ policies towards asylum seekers and refugees. In this paper, we provide a formal analysis of the effects of coordination, explicitly modelling the democratic process through which policy is determined. In a symmetric, two-country citizen-candidate setup, in which accepting asylum seekers in one country generates a cross-border externality in the other, we show that coordination is desirable. Internalizing the externality leads to a welfare improvement over the non-cooperative outcome. However, contrary to suggestions by many observers, we show that allowing for cross-country transfers in the cooperative outcome leads to a welfare inferior outcome because the possibility of compensation exacerbates strategic delegation effects. |
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Keywords: | Political economy Asylum policy Migration |
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