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The Link between Institutional and Economic Integration: Insights for Latin America from the European Experience

Author

Listed:
  • Ettore Dorrucci

    ()

  • Stefano Firpo

    ()

  • Marcel Fratzscher

    ()

  • Francesco Paolo Mongelli

    ()

Abstract

The European experience illustrates that institutional integration interacts with economic integration at the regional level. In this paper we ask how economic and institutional integration are linked and whether there is a causal link between the two. We present an original indicator of institutional integration and study how it developed vis--vis diverse measures of economic integration. In particular, we ask what insights can be drawn from the European process of regional integration, which started in the 1950s, for regional integration in Latin America today. We find that Latin America is currently less economically integrated not only than the European Union today, but for certain economic variables even than the European Union in the 1960s. A VAR analysis illustrates that the link between institutional and economic integration has worked both ways throughout the European experience. There is also evidence that stronger institutional integration has indeed led to deeper economic integration.

Suggested Citation

  • Ettore Dorrucci & Stefano Firpo & Marcel Fratzscher & Francesco Paolo Mongelli, 2004. "The Link between Institutional and Economic Integration: Insights for Latin America from the European Experience," Open Economies Review, Springer, vol. 15(3), pages 239-260, July.
  • Handle: RePEc:kap:openec:v:15:y:2004:i:3:p:239-260
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    Citations

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    Cited by:

    1. Campos, Nauro F & Coricelli, Fabrizio & Moretti, Luigi, 2014. "Economic Growth and Political Integration: Estimating the Benefits from Membership in the European Union Using the Synthetic Counterfactuals Method," CEPR Discussion Papers 9968, C.E.P.R. Discussion Papers.
    2. repec:got:cegedp:138 is not listed on IDEAS
    3. Mongelli, Francesco Paolo & De Grauwe, Paul, 2005. "Endogeneities of optimum currency areas: what brings countries sharing a single currency closer together?," Working Paper Series 468, European Central Bank.
    4. Libman, Alexander & Vinokurov, Evgeny, 2016. "Региональные Организации: Типы И Логика Развития
      [Regional Organizations: Typology and Development Paths]
      ," MPRA Paper 79383, University Library of Munich, Germany.
    5. Vinokurov, Evgeny, 2010. "The System of Indicators of Eurasian Integration," MPRA Paper 22227, University Library of Munich, Germany.
    6. Andrea Bonilla Bolaños, 2016. "A step further in the theory of regional integration: A look at the Unasur's integration strategy," Working Papers halshs-01315692, HAL.
    7. World Bank, 2012. "Reshaping Economic Geography of East Africa : From Regional to Global Integration, Volume 2. Technical Annexes," World Bank Other Operational Studies 11916, The World Bank.
    8. repec:got:cegedp:135 is not listed on IDEAS
    9. König, Jörg & Ohr, Renate, 2012. "Homogeneous groups within a heterogeneous community: Evidence from an index measuring European economic integration," Center for European, Governance and Economic Development Research Discussion Papers 138, University of Goettingen, Department of Economics.
    10. Bob Deacon & Philippe De Lombaerde & Maria Cristina Macovei & Sonja Schröder, 2011. "Globalisation and the emerging regional governance of labour rights," International Journal of Manpower, Emerald Group Publishing, vol. 32(3), pages 334-365, June.
    11. Francesco Paolo Mongelli, 2008. "European Economic and Monetary Integration, and the Optimum Currency Area Theory," European Economy - Economic Papers 2008 - 2015 302, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    12. Jörg König & Renate Ohr, 2013. "Different Efforts in European Economic Integration: Implications of the EU Index," Journal of Common Market Studies, Wiley Blackwell, vol. 51(6), pages 1074-1090, November.
    13. König, Jörg & Ohr, Renate, 2012. "Messung ökonomischer Integration in der Europäischen Union: Entwicklung eines EU-Integrationsindexes," Center for European, Governance and Economic Development Research Discussion Papers 135, University of Goettingen, Department of Economics.
    14. Vinokurov, Evgeny, 2009. "Systema Indikatorov Evraziyskoy Integracii
      [The System of Indicators of Eurasian Integration]
      ," MPRA Paper 20914, University Library of Munich, Germany.
    15. Itai Agur & Ettore Dorrucci & Francesco Mongelli, 2007. "Testing the Links between Institutional Integration and Trade Deepening: Clues from Europe," Open Economies Review, Springer, vol. 18(5), pages 599-612, November.

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