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Regional Integration and Development
This text examines regionalism from the perspective of developing countries. It presents a comprehensive account of existing theory and empirical results and incorporates the findings of formal analyses ofthe politics and dynamics of regionalism.
Regional Integration as Diplomacy
August 1997 This paper explores a world in which regional trade agreements help reduce security tensions between neighbors. Regional integration agreements (RIAs) are examples of second best and have an ambiguous impact on welfare, contend Schiff and Winters. They build a model in which RIAs unambiguously raise welfare by correcting for externalities. It assumes that trade between neighboring countries increases trust between them and reduces the likelihood of conflict. The optimum intervention in that case is a subsidy on imports from the neighbor. The authors show that an equivalent solution is for the neighboring countries to tax imports from the rest of the world- is, to form an RIA- wit...
Chile's Trade Policy
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Multilateral Trade Liberalization and Political Disintegration
Two theories are combined to explain why free trade areas have proliferated more than customs unions have.
Regional Cooperation, and the Role of International Organizations and Regional Integration
The authors examine regional cooperation among neighboring countries in the area of regional public goods. These public goods include water basins (such as lakes, rivers, and underground water), infrastructure (such as roads, railways, and dams), energy, and the environment. Their analysis focuses on developing countries and the potentially beneficial role that international organizations and regional integration may play in bringing the relevant countries to a cooperative equilibrium. A major problem in reaching a cooperative solution is likely to be the lack of trust. If neighboring countries do not trust each other because of past problems, they may fail to reach a cooperative solution as...
Outsiders and Regional Trade Agreements Among Small Countries
November 1997 Regional trade agreements among small countries may have negative welfare implications for nearby countries excluded from the agreement--but they sometimes benefit from being excluded. Standard theory says that a country's welfare is unaffected by being excluded from a small regional trade agreement. But for most products, small countries and regional trade agreements do have some measure of market power. Such market power can arise if (1) supply is geographically concentrated; (2) tastes differ; (3) there is product differentiation (such as quality); (4) transport costs are high; (5) the principal importing countries impose quantitative restrictions; and (6) there is hysterisi...
