Author information:
Maxim Chupilkin https://orcid.org/0000-0002-8188-6880: University of Oxford, DPhil Student; European Bank for Reconstruction and Development, Associate Economist. E-mail: chupilkm@ebrd.com
Zsóka Kóczán https://orcid.org/0000-0001-6653-6877: European Bank for Reconstruction and Development, Associate Director and Lead Economist. E-mail: KoczanZ@ebrd.com
Alexander Plekhanov https://orcid.org/0000-0002-9282-9283: European Bank for Reconstruction and Development, Director. E-mail: plekhana@ebrd.com
Abstract:
2024 marked the 20th anniversary of the EU accession of ten economies. Their experience was characterised by rapid growth in per capita incomes. Of the 23 percentage points of average convergence observed between the EU-10 and Germany between 2003 and 2023, 6 percentage points are shared with other emerging markets with similar characteristics, while the remaining 17 percentage points can be thought of as an ‘EU accession bonus’, facilitated by rapid growth in exports relative to GDP as they became deeply integrated into supply chains. Looking at the impact of EU accession in earlier waves, 20 years after joining, we also estimate a large ‘EU accession bonus’ for Spain and Portugal (which joined in 1986). Austria, Finland and Sweden (which joined in 1995) outperformed their synthetic controls only in the longer term and when comparators exclude Iceland, Liechtenstein, Norway and Switzerland – non-EU economies with access to the internal market.
Cite as (APA):
Chupilkin, M., Kóczán, Z., & Plekhanov, A. (2025). 20 years of EU Membership: What Explains the Accession Bonus?. Financial and Economic Review, 24(1), 52–73. https://doi.org/10.33893/FER.24.1.52
Column:
Study
Journal of Economic Literature (JEL) codes:
F15, F43, F63, O47
Keywords:
European Union, accession bonus, income convergence, trade integration
References:
Abadie, A. (2021): Using Synthetic Controls: Feasibility, Data Requirements, and Methodological Aspects. Journal of Economic Literature 59(2): 391–425. https://doi.org/10.1257/jel.20191450
Abadie, A. – Diamond, A. – Hainmueller, J. (2010): Synthetic control methods for comparative case studies: Estimating the effect of California’s Tobacco Control Program. Journal of the American Statistical Association, 105(490): 493–505. https://doi.org/10.1198/jasa.2009.ap08746
Abadie, A. – Diamond, A. – Hainmueller, J. (2011): Synth: An R Package for Synthetic Control Methods in Comparative Case Studies. Journal of Statistical Software, 42(13): 1–17. https://doi.org/10.18637/jss.v042.i13
Abadie, A. – Gardeazabal, J. (2003): The economic costs of conflict: A case study of the Basque Country. American Economic Review, 93(1): 113–132. https://doi.org/10.1257/000282803321455188
Abadie, A. – Vives-i-Bastida, J. (2022): Synthetic Controls in Action. ArXiv Preprint ArXiv:2203.06279. https://doi.org/10.48550/arXiv.2203.06279
Bache, I. – George, S. – Bulmer, S. (2011): Politics in the European Union. Oxford University Press.
Badinger, H. (2005): Growth effects of economic integration: Evidence from the EU member states. Review of World Economics, 141(1): 50–78. https://doi.org/10.1007/s10290-005-0015-y
Baldwin, R.E. – Seghezza, E. (1996): Growth and European Integration: Towards an Empirical Assessment. CEPR Discussion Paper No. 1393. https://cepr.org/publications/dp1393
Ben-David, D. (1993): Equalizing exchange: Trade liberalization and income convergence. Quarterly Journal of Economics, 108(3): 653–679. https://doi.org/10.2307/2118404
Ben-David, D. (1996): Trade and convergence among countries. Journal of International Economics, 40(3–4): 279–298. https://doi.org/10.1016/0022-1996(95)01405-5
Boltho, A. – Eichengreen, B. (2008): The Economic Impact of European Integration. CEPR Discussion Paper No. 6820. https://cepr.org/publications/dp6820
Bruszt, L. – Campos, N. (2017): State Capacity and Economic Integration: Evidence from the Eastern Enlargement. EUI RSCAS Working Paper No. 2017/52. https://hdl.handle.net/1814/48387
Campos, N. – Coricelli, F. (2002): Growth in transition: What we know, what we don’t, and what we should. Journal of Economic Literature, 40(3): 793–836. https://doi.org/10.1257/002205102760273797
Campos, N. – Coricelli, F. – Franceschi, E. (2022): Institutional Integration and Productivity Growth in Europe: Synthetic Differences-in-Differences Evidence from the 1995 Enlargement of the European Union. European Economic Review, 142, 104014. https://doi.org/10.1016/j.euroecorev.2021.104014
Campos, N.F. – Coricelli, F. – Moretti, L. (2019): Institutional Integration and Economic Growth in Europe. Journal of Monetary Economics, 103(1): 88–104. https://doi.org/10.1016/j.jmoneco.2018.08.001
Crespo Cuaresma, J. – Ritzberger-Grünwald, D. – Silgoner, M.A. (2008): Growth, convergence and EU membership. Applied Economics, 40(5): 643–656. https://doi.org/10.1080/00036840600749524
de Souza, L.V. – Diaz, D. (2024): Growth and Convergence in Portugal: Historical and Policy Experiences at National and Metropolitan Level. Notas Económicas, No. 58(2024): 37–63. https://doi.org/10.14195/2183-203X_58_2
EBRD (2012): Integration across borders. Transition Report 2012. https://www.ebrd.com/downloads/research/transition/tr12.pdf
EBRD (2019): Eight things you should know about middle-income transitions. EBRD, London. https://www.ebrd.com/publications/ebrd-middle-income-transitions.pdf
EBRD (2024): Taming inflation. Regional Economic Prospects, May 2024. https://www.ebrd.com/rep-may-2024.pdf
Grassi, B. (2024): The EU miracle: When 75 million reach high income. CEPR Discussion Paper 19114. https://cepr.org/publications/dp19114
Henrekson, M. – Torstensson, J. – Torstensson, R. (1997): Growth effects of European integration. European Economic Review, 41(8): 1537–1557. https://doi.org/10.1016/S0014-2921(97)00063-9
IMF (2024): A recovery short of Europe’s full potential. In: Regional Economic Outlook, Europe, October 2024. https://doi.org/10.5089/9798400287312.086
King, G. – Zeng, L. (2006): The Dangers of Extreme Counterfactuals. Political Analysis, 14(2): 131–159. https://doi.org/10.1093/pan/mpj004
Rubin, D.B. (1974): Estimating causal effects of treatments in randomized and nonrandomized studies. Journal of Educational Psychology, 66(5): 688–701. https://doi.org/10.1037/h0037350
Slaughter, M. (2001): Trade liberalization and per capita income convergence: a difference-in-differences analysis. Journal of International Economics, 55(1): 203–228. https://doi.org/10.1016/S0022-1996(00)00087-8
Szapáry, G. – Vonnák, B. (2024): The Impact of Monetary Policy Institutional Decisions on Convergence in Central and Eastern European Countries. Financial and Economic Review, 23(4): 120–152. https://doi.org/10.33893/FER.23.4.120