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Regional Integration and Cooperation in Sub-Saharan Africa: Are Formal Trade Agreements the Right Strategy?

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  • Steven Radelet

    (U.S. Treasury for Africa)

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    This paper examines the potential for success for trade-focused regional integration agreements in sub-Saharan Africa, with a particular focus on southern Africa. The paper surveys the existing literature on regional integration, and attempts to distill the most relevant lessons about success and failure for the current integration initiatives in the region. It finds that there is little reason to expect significant economic gains from formal trade agreements at this time. Such agreements, in and of themselves, are unlikely to yield appreciable benefits unless they are preceded by decisions within member countries to follow more general open trade strategies. Indeed, it is possible that they could be detrimental to the economies involved, either because they might encourage import substitution on a regional basis (as has happened in the past) or simply because thy absorb scarce administrative and financial resources. More open trade policies coupled with more disciplined fiscal and monetary policies (and hence more economic stability), perhaps augmented by regional cooperation efforts on transportation and communications infrastructure, appears to be a more promising initial strategy.

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    Article provided by African Finance and Economic Association in its journal Journal of African Development.

    Volume (Year): 4 (2001)
    Issue (Month): 1 ()
    Pages: 224-247

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    Handle: RePEc:afe:journl:v:4:y:2001:i:1:p:224-247
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