zondag 8 februari 2015

The fluid (super)state

Problem

Some areas need development, but no other body wants to donate. Not even the EU.

Think: unemployment in Greece and Spain, economic migration from Eastern Europe.

Solution

Countries may invest in other countries, and keep the assets.

Analysis

It should be possible to let the superstate (the EU) invest in it's member state, contributing to the EU's GDP. Every state has an incentive in making these investments work, as they provide means for the functioning of the EU that should not come from the EU. Moreover, even if all capital gains are for the EU, regions may flourish because of spillovers. This is the trade to be able to plant the investments in one country.

Similarly, one may think of investments of some state in the people in other states, because there is demand for development. In that case, some jurisdiction may be granted. For instance, a Moroccan may effectively be German and work for Germany, but live in geographical Morocco. As far as nationality is concerned, this already exists: Estonia grants virtual citizenship to people abroad.

In the days of colonization, economic transfrontier operation of course also existed. The withdrawal has costed money both to the receiving countries as to the former colonial powers. My concept is not a restoration of dominance, but rather fluidity in the owernship of capital assets. This is to be paired with the possibility to "vote with the feet", as Friedman puts it. So essentially there is cross-country trade and investments (FDI, if you want), but also the option for citizens to change nationality. The end objectif is to have well designed states expanding and attracting people, without directly taking over territory.