Enlargement of the European Union and the approximation of law : lessons from an economic theory of optimal legal areas

Before joining the European Union countries from Central and Eastern Europe have to adopt the acquis communautaire, i.e. the system of legal rules developed in the Union. The paper outlines an economic theory of optimum legal areas, that is used to determine the optimal size of the Union as well as winners and losers of enlargement. The model also allows to identify an applicants dilemma: by adopting the acquis potential entrants reduce the probability of admittance to the club.