Basically, an economic union grows from the simplest stage known as a Preferential Trade Area (PTA) or what’s commonly known as a Free Trade Area (FTA) through Monetary Union and into an advanced level of Political Union. Joining an economic union is not simple and also exiting from the union is not an over the counter transaction.
Currently, we are witnessing the project effects of Britain’s exit from the European Union among the immediately displayed being a political crisis where the Prime minister David Cameron announced that he will be resigning from the said post as he strongly opposed the Brexit move to pave way for another person who is in support of the move.
A series of serious implications of this move are expected to take at least a decade to show up. Among the challenges projected to occur are serious economic and social crisis which may result from disagreement among the political powers. Among the projected social crisis to be witnessed are poor international relationships among the UK member countries where we have witnessed some of them such as Scotland presenting their grievances and even noting that they make disintegrate from the political bloc.
From an economic perspective, all the three pillars that is the political pillar, economic pillar and the social pillar are all interconnected and thus tampering with any of them results to imbalances in the system. According to the pareto optimality condition, you cannot make someone better off without making someone else worse off. In this regard I view the move by the Britons as a pareto inefficient allocation as many of the EU member countries are expected to be worse off including Britain itself.