Regional Integration Arrangements in Economic Development: Panacea or Pitfall?

Author: Percy Mistry


This study is written by one of the stimulating forces in Fondad's research project on regionalism and multilateralism, Indian economist and investment banker Percy S. Mistry. Earlier drafts served as a framework paper to guide and inspire the thinking of participants in Fondad conferences. Mistry reviews issues arising from experience with arrangements for regional economic cooperation and integration in developing and developed regions of the world. Given the plethora and complexity of the issues involved ranging from trade, finance and monetary matters to institutional, social and political affairs the author has chosen a broad approach. However, at various points Mistry also presents some of his more detailed insights and policy suggestions.


Contents, Abbreviations

Preface by Jan Joost Teunissen

1 A Retrospective on Regional Integration Arrangements

  • Introduction
  • A Tour d'Horizon of RIAs Around the World
  • The Role of Regionalism in the Emerging World Order

2 The Role of RIAs in Fostering Economic Development

  • Introduction, Lessons from the Past
  • The Inadequacy of Classical Theoretical Constructs
  • Orthodox (Static) Gains from RIAs
  • Unorthodox (Dynamic) Gains from RIAs
  • Political Commitment to RIAs and the Issue of Credibility
  • Equity and Regional Policy

3 Reducing Non-Tariff Barriers

  • Barriers to Trade Gains
  • Barriers to Production
  • Barriers to Cross-Border Investment
  • Other Barriers

4 The Experience of Developed vs. Developing Countries

  • Why First-Generation RIAs Failed in Developing Countries
  • Lessons for the Future

5 Second-Generation RIAs in the Developing World

  • Determinants of Success
  • Linking Up with Large Trade Blocs

6 Options for Creating Regional Trade Preferences Among Developing Countries

  • The Role of Bilateral Agreements
  • The Role of Customs Unions
  • The Role of Preferential and Free Trade Areas

7 Regionalisation vs. Globalisation: The Issues

  • Regionalism as a Mezzanine Step
  • Trade Blocs
  • GATT Rules
  • Theoretical Objections and Practical Benefits

8 Synopsis and Conclusions

  • The Road Ahead for Developing Countries
  • The Political Dimension
  • The Role of Donors
  • Learning from Experience
  • Distribution of Costs and Benefits
  • Regional Adjustment Programmes
  • External Linkages
  • A Pragmatic Approach to Strengthening RIAs in Developing Countries

Annexes and Bibliography

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October 1996
ISBN-10: 90-74208-08-8

98 pages

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