On the institutional design of burden sharing when financing external border enforcement in the EU

Illegal immigration affects not only EU member states at the Mediterranean Sea but also more Northern states due to open internal borders and onward migration. Northern member states may free-ride on border countries’ enforcement efforts, leading to a sub-optimal level of border control. While neither a centralized nor a coordinated policy appears to be feasible, we show that employing an expected externality mechanism leads to voluntary preference revelation with respect to immigration policy under several (but not all) scenarios. This policy measure requires, however, the EU Commission to take on a very active role as moderator between member states, which at the same time must accept the Commission to play this role.