Strategic Immigration Policies and Welfare in Heterogeneous Countries

In this paper we consider a model with two industrialised countries and immigrants that come from “the rest of the world”. The countries are distinguished on the basis of three parameters: population size, bias towards immigrants, and production complementarity between native population and immigrants. We consider a non-cooperative game where each country makes a strategic choice of its immigration quotas. We first show that our game admits a unique pure strategy Nash equilibrium and then study the welfare implications of countries’ choices. It turns out that a county with a higher degree of production complementarity and a higher level of tolerance towards immigrants would allow a larger immigration quota and achieve a higher welfare level. Our results call for coordinated and harmonised immigration policies that may improve the welfare of both countries.Immigration quotas, Heterogeneity, Production complementarity, Welfare, Policy Harmonisation

Languages Disenfranchisement in the European Union

We introduce the notion of language disenfranchisement which arises if the number of EU working languages is reduced. We use the data on language proficiency in EU and show that, in spite of the widespread knowledge of English, the retention of French and German as working languages in essential to avoid a too large degree of disenfranchisement of citizens. The picture, however, becomes somewhat different if we consider the population under age of 40. We also argue that even though French is the second leading language within the EU, the situation is likely to be reversed after the enlargement.Languages, Disenfranchisement, European Union

Linguistic diversity and redistribution

This paper investigates the effect of linguistic diversity on redistribution in a broad cross-section of countries. We use the notion of "linguistic distances" and show that the commonly used fractionalization index, which ignores linguistic distances, yields insigni cant results. However, once distances between languages are accounted for, linguistic diversity has both a statistically and economically signi cant effect on redistribution. With an average level of redistribution of 9.5 percent of GDP in our data set, an increase by one standard deviation in the degree of diversity lowers redistribution by approximately one percentage point. We also demonstrate that other measures, such as polarization and peripheral heterogeneity, provide similar results when linguistic distances are incorporated.The authors wish to thank the nancial support of the Comunidad de Madrid (grant 06/HSE/0157/2004) and of the Fundación BBVAPublicad

Stable Partitions in a Model with Group-Dependent Feasible Sets.

In this paper we consider a model of group formation where group of individuals may have different feasible sets. We focus on two polar cases, increasing returns, when the set of feasible alternatives increases if a new member joins thegroup, and decreasing returns, when a new member has an opposite effect and reduces the number of alternatives available for the enlarged group. We consider two notions, stability and strong stability of group structures, that correspond to Nash and Strong Nash equilibrium of the associated non-cooperative game. We prove existence results for various classes of environments and also investigate the link between the dimensionality of the set of alternatives and the existence of stable structures.feasible sets; stable partitions; positive externality; increasing and decreasing returns

The Art of Making Everybody Happy: How to Prevent a Secession

In this paper we examine compensation schemes that prevent a threat of secession by any of a country's regions. We prove that, under quite general assumptions on the distribution of citizens' preferences, there exist transfer schemes that are secession-proof. Moreover, we show that these compensation schemes entail a degree of partial equalization among regions: the gap between advantaged regions and disadvantaged regions has to be reduced but it should never be completely eliminated. We demonstrate that in the case of a uniform distribution of the nation's citizens, the secession-proof conditions generate the 50 percent compensation rule for disadvantaged regions. Copyright 2003, International Monetary Fund

Ever closer Union or Babylonian discord? The official-language problem in the European Union

The policy of official multilingualism is one of the most important and fundamental principles of the Union. However, a large number of official languages imposes substantial financial, communication and legal costs. We address the merits of extensive multilingualism and formulate an analytical framework to determine the optimal number of official languages in the EU. First, we derive the sequence of optimal sets of languages which identifies the sets of languages that minimize aggregate linguistic disenfranchisement of the Union's citizens for any given number of languages. We then proceed by discussing the political-economy framework and feasibility of a potential linguistic reform in the EU under various voting rules, including the Nice Treaty, the proposed European Constitution and the Penrose law. We argue that a six-language regime would be a reasonable intermediate choice: a lower number of official languages results in excessive linguistic disenfranchisement whereas adding further languages increases the costs but brings only modest benefits. We also show that even though a linguistic reform reducing the number of official languages to six is unlikely to gain sufficient support at the present, this may change in the future since young people tend to be more proficient at speaking foreign languages.languages, disenfranchisement, European Union, linguistic standardization

On Blocking Coalitions: Linking Mas-Colell with Grodal-Schmeidler-Vind

In this paper we investigate the question of how many coalitions of a given relative size would block a non-Warlasian allocation in large finite economies. It is shown that in finite economies, if a Pareto optimal allocation is bounded away from being Walrasian, then, for any two numbers α, β between 0 and 1, the proportion of blocking coalitions in the set of all coalitions with relative size between α and β, is arbitrarily close to 1/2, as the number of individuals in the economy becomes large.

Voting on the Choice of Core Languages in the European UnionÂ

Extensive multilingualism is one of the most important and fundamental principles of the European Union (EU). However, a large number of languages (currently 23) hinders communication and imposes substantial financial and legal costs. On the other hand, the reduction of the number of languages would disenfranchise some or many EU citizens. We use the results of a survey on languages and argue that even though a linguistic reform reducing the number of languages is unlikely to gain sufficient political support today, this may change in the future since young people are more proficient at speaking foreign languages.Languages, Disenfranchisement, European Union, Linguistic standardization