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.
01 February 2019
'Citizenship for Sale: A Dilemma of Rights' (Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2019-01) by Kai A. Konrad and Ray Rees comments