Regional Integration Theory

Kato Kimbugwe, Nicholas Perdikis, May Yeung and William Kerr
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Kato Kimbugwe: Aberystwyth University
Nicholas Perdikis: Aberystwyth University

Chapter 4 in Economic Development Through Regional Trade, 2012, pp 76-98 from Palgrave Macmillan

Abstract: Abstract The literature on regionalism covers contributions in economics, international relations and political economy. This chapter focuses upon the literature pertaining to the development of regional integration theory. Economic analysis of regions begins with the classic customs unions theories formulated by Viner (1950), Meade (1956) and Lipsey (1957), which have more recently been extended to include imperfect competition by Baldwin (1997b), Schiff and Winters (2002) and others. The traditional theory is contrasted with ‘developmental regionalism’ as espoused by York (1993), Asante (1997) and Page (2000) in reference to developing countries and is still dominant among scholars concerned with regionalism in Africa. The trend towards deeper integration is assessed together with the motivation for integration. Henceforth, the first objective of this chapter is to highlight the development of the theory from the static through to the dynamic and finally to open and developmental regionalism. The second is to identify the impact of trade barriers, both tariff and NTBs, on trade, welfare and competition within RTAs. The chapter firstly maps the evolution of the theory by discussing the motivation for regional integration, its static and dynamic effects and the differing schools of thought on regionalism. Secondly, it examines the negative and discriminatory effects of regionalism and the measures available to offset or reduce these effects. Thirdly, it examines the cost/price effects of barrier removal within a customs union. Lastly, the chapter concludes with an overview of the importance and limits of regionalism.

Keywords: Member Country; Regional Integration; Regional Trade; Custom Union; Trade Diversion (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1057/9780230369924_4

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