On the Methodology of Studying Differentiated (Dis)integration: Or How the Potential Outcome Framework Can Contribute to Evaluating the Costs and Benefits of Opting In or Out

Abstract

The European Commission's 2017 White Paper on the Future of Europe sets out several scenarios related to differentiated (dis)integration. But although our understanding of the causes of differentiated (dis)integration has substantively improved over recent years, our knowledge about its consequences still remains limited. This shortcoming may lead to difficulties when it comes to formulating policy recommendations. Accordingly, we propose closer attention to the effects-of-causes of differentiated (dis)integration, linked to a more careful implementation of insights on causal inference. After briefly reviewing the foci and methods of existing literature on differentiated (dis)integration, we introduce a potential outcome model of causal inference. We provide an illustrative application of the synthetic control method, as one method related to this framework. Our analysis shows that the UK has economically benefitted from not joining the eurozone, but our argument more generally is about the practical implications of methodological choices in the study of differentiated (dis)integration.