Under which conditions is external differentiated integration effective, and what lessons can be drawn from the experience of the EEA for the implementation of differentiated integration within and outside the EU? By addressing these two questions, this thesis goes beyond the typical explanations of differentiated integration in various ways. First, it compares internal and external differentiated integration, allocating a place to the EEA EFTA states in the European system of differentiated integration. Secondly, it shifts the focus from the explanations of the EEA EFTA states’ rejection of full membership towards the analysis of the functioning and effectiveness of their legal relationship with the EU. Thirdly, it puts forward a comprehensive analysis of the EEA EFTA states’ legal relationship rather than a comparison of specific cases.