Regional Integration and Economic Development: Optimal or Messy Networks?

Gaspare M. Genn (), Zining Yang () and Mark Abdollahian ()
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Gaspare M. Genn: Political Science and Public Administration, Postal: The University of Texas at El Paso; El Paso;, Texas; USA
Zining Yang: Cal Poly Pomona, California, USA, Postal: Cal Poly Pomona, Pomona; California;, USA
Mark Abdollahian: Claremont Graduate University, California, USA, Postal: Claremont Graduate University; Claremont; California;, USA

Journal of Economic Integration, 2024, vol. 39, issue 3, 557-589

Abstract: States join regional integration organizations (RIOs) hoping that membership will boost economic development. Such cooperation should improve the efficiency of economic factors via firm competition, which will promote development. We argue that economic growth is difficult to produce when states form overlapping memberships and join RIOs with economies of similar size and similar levels of development. While joining an RIO may be beneficial, many overlapping memberships tend to involve larger costs through added obligations, leading to low economic performance. Integrating with similarly sized economies is not as beneficial as integrating with larger, relatively wealthier partners. We support our hypotheses using 180 states from 1962-2014. Using social network and time-series analysis, we find that joining multiple RIOs tends to decrease GDP per capita growth. However, the effect is not uniform: the negative effect is stronger in lesser-developed countries and does not hold when RIO membership includes a large economic partner.

Keywords: comparative regional integration; economic performance; asymmetric power; developing economies; social network analysis; time series regression (search for similar items in EconPapers)
JEL-codes: F12 F13 F14 F15 F55 F63 (search for similar items in EconPapers)
Date: 2024
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