The new regionalism: a country perspective

Jaime de Melo, Arvind Panagariya and Dani Rodrik

No 1094, Policy Research Working Paper Series from The World Bank

Abstract: Regional integration is on the rise again, despite its apparent failure among developing countries in the past. The authors survey the ambiguous economies of customs unions, emphasizing that the traditional dichotomy between"trade creation"and"trade diversion"is not particularly helpful for policy. In a world with trade restrictions, regional integration presents certain advantages, including enhanced bargaining power and market access. The authors also point out that integration enforces arbitrage in institutions as well as in markets for goods and factors. This kind of arbitrage can lead to improved economic outcomes by making decision-making less sensitive to economically harmful factional interests - especially when regional institutions are designed properly. An empirical evaluation of existing schemes produces no evidence that membership in integration schemes has any effect on growth. Finally, the authors note that recent attempts at regional integration have different starting points and objectives than past efforts - so history is a poor guide to the future of regional integration.

Keywords: Trade and Regional Integration; Economic Theory&Research; Trade Policy; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Environmental Economics&Policies (search for similar items in EconPapers)
Date: 1993-02-28
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Citations: View citations in EconPapers (62)

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Related works:
Chapter: The New Regionalism: A Country Perspective (2015)
Working Paper: The New Regionalism: A Country Perspective (1992)
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