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Political Economy of East Asian Regional Integration and Cooperation


  • Katada, Saori N.

    (Asian Development Bank Institute)


In the last decade, East Asia has engaged in constructing numerous mechanisms to enhance regional cooperation in the areas of trade and finance. However' the region's economic architecture exhibits certain idiosyncrasies such as an eclectic institutional structure and a limited level of commitment shown by its members. These idiosyncrasies seem to prevent regional cooperation from becoming deeper and more coherent. This paper focuses on the political factors that have thus far shaped the institutional form of East Asian regional trade and financial cooperation' particularly in the three essential aspects of regionalism derived from the theories of regional institution building. The first aspect is the level at which governments are willing to compromise sovereignty and political autonomy for the sake of regional cooperation. The second is the progress in creating mechanisms through which the “losers” and the “weak” within a country or region can be compensated. The third is the clear definition of which members can benefit from such mechanisms. These three elements are useful in furthering regional cooperation and institution building by removing resistance and obstacles that work against functional spillovers. The paper argues that East Asia's economic institutions established through the cooperation efforts of the last ten years exhibit different qualities from those that have emerged in Europe' and thus fall far short of overcoming unexpected political tensions in the region. These deficiencies' however' contrast in two important fields of regional integration. In finance' the clearly defined member governments have difficulty compromising their respective national macroeconomic policy autonomy' while in the field of regional trade cooperation' the challenge is in redistributing the economic gains to those who stand to lose during the process of integration' or to the countries that have a long distance to catch up within a relatively well-defined group.

Suggested Citation

  • Katada, Saori N., 2009. "Political Economy of East Asian Regional Integration and Cooperation," ADBI Working Papers 170, Asian Development Bank Institute.
  • Handle: RePEc:ris:adbiwp:0170

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    east asian regional integration; asia regional trade cooperation; asia institutional regional cooperation;

    JEL classification:

    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other

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