Kai A. Konrad (Max Planck Institute for Tax Law and Public Finance; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute for Economic Research); IZA Institute of Labor Economics) & Ray Rees (Ludwig Maximilian University of Munich – Faculty of Economics; CESifo (Center for Economic Studies and Ifo Institute)) have posted Citizenship for Sale: A Dilemma of Rights on SSRN. Here is the abstract:
Motivated by the commercialization of citizenship rights in the European Union, we study the market for citizenship in a confederation or union of countries if the countries have full sovereignty over the right to grant national citizenship, and if this national citizenship endows members with benefits and citizenship rights of the confederation. We characterize the unique equilibrium and evaluate it from a welfare point of view. We identify country size and local and federal benefits as well as differences in local and union-wide cost externalities as the key determinants. We also consider how the union as a whole can respond to the efficiency problems such a market creates.