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Regional Integration as Diplomacy

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  • Schiff, Maurice
  • Winters, L Alan

Abstract

Security threats have moved neighbouring countries to form regional integration arrangements (RIAs), including the European Coal and Steel Community (ECSC, 1951), the EEC (1957), and various RIAs among developing countries. This paper shows that an RIA – together with domestic taxes – is an optimal response to security concerns among neighbouring countries. It shows that: i) the optimum external tariffs are likely to decline over time; ii) deep integration implies lower optimum external tariffs if it is exogenous, and higher optimum external tariffs before deep integration and lower ones thereafter if deep integration is endogenous; and iii) enlargement of bloc size has an ambiguous impact on external tariffs but raises welfare, and has some form of domino effect

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Bibliographic Info

Article provided by World Bank Group in its journal World Bank Economic Review.

Volume (Year): 12 (1998)
Issue (Month): 2 (May)
Pages: 271-95

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Handle: RePEc:oup:wbecrv:v:12:y:1998:i:2:p:271-95

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  1. Cadot, Olivier & de Melo, Jaime & Olarraga, Marcelo, 1999. "Regional Integration and Lobbying for Tariffs against Nonmembers," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(3), pages 635-57, August.
  2. Hirschman, Albert O, 1982. "Rival Interpretations of Market Society: Civilizing, Destructive, or Feeble?," Journal of Economic Literature, American Economic Association, vol. 20(4), pages 1463-84, December.
  3. Smith, Alasdair, 1992. "Measuring the effects of '1992'," Discussion Papers in Economics 07/92, Department of Economics, University of Sussex.
  4. Marco López-Cerdá & Guillermo Owen & Jos Potters & Carles Raffels & E. Calvo & F. Valenciano & J. Zarzuelo, 1993. "Discussion," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer, vol. 1(1), pages 36-51, December.
  5. repec:fth:geneec:96.07 is not listed on IDEAS
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