Economic effects of international economic disintegration in the case of Brexit

[M. Z. Đokić]

317 str.

Biografija autora: str. 317 Bibliografija: str. 292-316

International Economics

Тhe 20th century is often considered as the age of integration, therefore it is not surprising that the most part of professional and scientific literature has been dedicated to the different forms of economic cooperation and its effects for decades. Globalization process, along with the increasing openness and dependence of national economies, created the need for a closer interconnection and institutional regulation of mutual relations in order to achieve all the advantages of international trade, freedom of movement and economic cooperation. As a result, numerous trade blocs, associations, free trade zones and economic communities emerged. However, in recent years, disintegration tendencies have been more and more present. The protection of one's own interests, the difficulty with harmonizing and finding common goals, unequal treatment and rising economic disparities are the most common reasons for member states to leave certain integration and for regions to demand separation from the rest of the country. This issue gained significant importance after the exit of the United Kingdom of Great Britain and Northern Ireland (UK) from the largest and strongest economic integration in the world - the European Union (EU). As a result, the longstanding euroscepticism has become even more pronounced, so the question of what future awaits the EU and whether Brexit is just an exception or the beginning of its disintegration, is legitimately being asked. The purpose of this dissertation is to explain the process of international economic disintegration and determine the breadth and severity of its economic effects, indicating the complexity of international economic relations and interconnection within integration. This is realized through several steps. First, an overview of the various forms of integration of national economies and their characteristics is given, in order to reveal the motives for joining an economic integration, its major advantages and disadvantages, so that the reverse process of leaving the integration, the reasons for it and its potential effects, could be better understood. Then, the most significant disintegration processes in the world economy are identified, a summary of the UK's membership in the EU and the exit process is made, as well as an outline of the current state of European integration. The importance of EU membership for the UK economy in the last few decades is analyzed in detail through its impact on foreign trade, financial market, investments, population migration and economic development in general, along with the expected effects of withdrawal. In addition, the consequences of Brexit on the remaining EU members and the European Union as a whole are examined, by identifying the most vulnerable regions and economic sectors and determining the intensity of caused effects not just on them but on the position of the EU on the international market as well. Furthermore, changes occurring in the rest of the world as the result of the Brexit are analyzed and potential outcomes for the UK in international economic and geopolitical relations are given. Following a detailed theoretical research and explanation of the international economic disintegration process and its consequences in the case 8 of Brexit, the quantification of disintegration effects is made. The empirical part of the paper provides a quantitative presentation of the economic effects of the Brexit announcement after the referendum and the exit from the EU common market on the UK’s foreign trade, net inflow of foreign direct investment and gross domestic product. The results obtained, although somewhat blurred by the concurrent impact of the coronavirus pandemic, indicate that Brexit has a negative impact on the UK's economic performance and suggest that leaving the EU, at least for now, does not seem like a good decision. Due to the extraordinary circumstances and unexpected events that have befallen the world in recent years and the short period of time that has passed since the UK's exit from the EU, it is difficult to make a final judgment about the effects of Brexit with certainty. Nevertheless, the findings and conclusions of scientific research as the one carried out here could have practical significance and application by providing a starting point to policy makers, as an example that they can look up to if they are considering a decision to leave any integration and especially the EU. Since this is the first case of a sovereign state and a full member leaving the EU ever, the importance of the study is all the greater because it shows all the complexity of the process and the effects that such a decision causes. Conducting this kind of analyses could help the public understand the expected effects of each decision, giving the population all the necessary information to be able to correctly express their opinion at the referendum.

Bregzit, međunarodna ekonomska (dez)integracija, međunarodni ekonomski odnosi, evropske integracije, Evropska unija

Brexit, international economic (dis)integration, international economic relations, European integration, European Union

339.922(410:4-672EU)"20"(043.3) 327(410)"20"(043.3)

S180 S186

Tekst