The New Regionalism: A Country Perspective
Regional integration is on the rise again, despite its apparent failure among developing countries in the past. The paper first surveys the ambiguous economics of customs unions. We emphasize that the traditional dichotomy between `trade creation' and `trade diversion' is not particularly helpful for policy. In a world with trade restrictions, regional integration presents certain advantages including enhanced bargaining power and market access. We then turn to institutional aspects of regional integration, and point out that integration enforces arbitrage in institutions as well as in markets for goods and factors. This kind of arbitrage can lead to improved economic outcomes by rendering decision-making less sensitive to economically harmful factional interests, especially when regional institutions are designed properly. Finally, we turn to an empirical evaluation of existing schemes. We note there is no evidence that membership in integration schemes has any effect on growth. We close by noting that recent attempts at integration have very different starting points and objectives than past efforts. History is therefore a poor guide to the future of regional integration.
|Date of creation:||Sep 1992|
|Contact details of provider:|| Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.|
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Langhammer, Rolf J. & Hiemenz, Ulrich, 1990. "Regional integration among developing countries: opportunities, obstacles and options," Open Access Publications from Kiel Institute for the World Economy 416, Kiel Institute for the World Economy (IfW).
- Bhagwati, Jagdish, 1990. "Departures from Multilateralism: Regionalism and Aggressive Unilateralism," Economic Journal, Royal Economic Society, vol. 100(403), pages 1304-1317, December.
- Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-959, December.
- Jonathan Eaton & Gene M. Grossman, 1986.
"Optimal Trade and Industrial Policy Under Oligopoly,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 101(2), pages 383-406.
- Jonathan Eaton & Gene M. Grossman, 1983. "Optimal Trade and Industrial Policy Under Oligopoly," NBER Working Papers 1236, National Bureau of Economic Research, Inc.
- Erzan, Refik & Yeats, Alexander, 1992. "Free trade agreements with the United States : what's in it for Latin America?," Policy Research Working Paper Series 827, The World Bank.
- Corden, W M, 1972. "Economies of Scale and Customs Union Theory," Journal of Political Economy, University of Chicago Press, vol. 80(3), pages 465-475, May-June.
- Berglas, Eitan, 1979. "Preferential Trading Theory: The n Commodity Case," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 315-331, April.
- Corden, W.M., 1984. "The normative theory of international trade," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 2, pages 63-130 Elsevier.
- Corden, W. M., 1976. "Customs union theory and the nonuniformity of tariffs," Journal of International Economics, Elsevier, vol. 6(1), pages 99-106, February.
- Lopez, Ramon & Panagariya, Arvind, 1992. "On the Theory of Piecemeal Tariff Reform: The Case of Pure Imported Intermediate Inputs," American Economic Review, American Economic Association, vol. 82(3), pages 615-625, June.
- Fischer, Stanley, 1990. "Rules versus discretion in monetary policy," Handbook of Monetary Economics, in: B. M. Friedman & F. H. Hahn (ed.), Handbook of Monetary Economics, edition 1, volume 2, chapter 21, pages 1155-1184 Elsevier.
- C. A. Cooper & B. F. Massell, 1965. "Toward a General Theory of Customs Unions for Developing Countries," Journal of Political Economy, University of Chicago Press, vol. 73, pages 461-461.
- Summers, Robert & Heston, Alan, 1988. "A New Set of International Comparisons of Real Product and Price Levels Estimates for 130 Countries, 1950-1985," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 34(1), pages 1-25, March.
- Wonnacott, Paul & Wonnacott, Ronald, 1984. "How General Is the Case for Unilateral Tariff Reduction?," American Economic Review, American Economic Association, vol. 74(3), pages 491-491, June. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:715. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.