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Regional Integration as Diplomacy

  • Schiff, Maurice
  • Winters, L. Alan

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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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1690.

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Date of creation: Oct 1997
Date of revision:
Handle: RePEc:cpr:ceprdp:1690
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  1. 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.
  2. Hirschman,Albert O., 1981. "Essays in Trespassing," Cambridge Books, Cambridge University Press, number 9780521282437.
  3. Cadot, Olivier & de Melo, Jaime & Olarreaga, Marcelo, 1996. "Regional Integration and Lobbying for Tariffs Against Non-members," CEPR Discussion Papers 1448, C.E.P.R. Discussion Papers.
  4. Smith, Alasdair, 1992. "Measuring the effects of '1992'," Discussion Papers in Economics 07/92, Department of Economics, University of Sussex.
  5. 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.
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