Tuesday, 23 April 2019

How Britain unified Germany: Endogenous trade costs and the formation of a customs union

a column by Thilo Huning and Nikolaus Wolf for VOX: CEPR’s Policy Portal

State borders can change due to both political and economic disputes.

This column shows how the formation of the German state can be traced back to British political intervention at the end of the Napoleonic War. In preventing Russia from gaining territory westwards, Britain set in motion a series of events that gave Prussia strategic trade advantages. This led to the formation of Europe's first customs union (the Zollverein) and prepared the political unification of Germany.

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