Regional Integration as Diplomacy

Maurice Schiff and L. Winters

No 1690, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Security threats have moved neighbouring countries to form regional integration arrangements (RIAs), including the European Coal and Steel Community (ECSC, 1951), the EEC (1957), and various RIAs among developing countries. This paper shows that an RIA – together with domestic taxes – is an optimal response to security concerns among neighbouring countries. It shows that: i) the optimum external tariffs are likely to decline over time; ii) deep integration implies lower optimum external tariffs if it is exogenous, and higher optimum external tariffs before deep integration and lower ones thereafter if deep integration is endogenous; and iii) enlargement of bloc size has an ambiguous impact on external tariffs but raises welfare, and has some form of domino effect

Keywords: Diplomacy; Regional Integration; Security (search for similar items in EconPapers)
JEL-codes: F02 F15 (search for similar items in EconPapers)
Date: 1997-10
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Citations: View citations in EconPapers (24)

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Related works:
Journal Article: Regional Integration as Diplomacy (1998)
Working Paper: Regional integration as diplomacy (1997)
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