 Do Economic Integration Agreements Actually Work? Issues in Understanding the Causes and Consequences of the Growth of RegionalismScott Baier, Jeffrey Bergstrand, Peter Egger and Patrick McLaughlin () The World Economy, 2008, vol. 31, issue 4, 461-497 Abstract: This paper argues that the ‘competitive liberalisation’ of national governments of the past several decades has created a ‘market’ for regional economic integration agreements (EIAs). Evidence shows that countries that have selected into EIAs – such as free trade agreements – have ‘chosen well’ in the sense that the same economic characteristics that explain and predict bilateral EIAs also explain and predict bilateral trade flows. We show that previous ex post empirical evaluations of the effects of EIAs on trade have tended to underestimate the effects due to ignoring the (endogenous) self‐selection bias of country pairs into EIAs. Accounting for this bias, we find that European economic integration had a much larger impact on trade over the period 1960–2000 than previously found, and other more recent EIAs have had economically and statistically significant effects on members’ trade. The results shed further light on understanding the causes and consequences of the growth of regionalism. Date: 2008 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:worlde:v:31:y:2008:i:4:p:461-497 Ordering information: This journal article can be ordered from Access Statistics for this article The World Economy is currently edited by David Greenaway More articles in The World Economy from Wiley Blackwell |
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