Regional integration among developing countries : survey of past performance and agenda for future policy action

Abstract

Experience with regional integration among developing countries over the past twenty-five years has been far from satisfactory. Most integration schemes were based on the European Economic Community model and failed to meet their own targets for establishing free trade areas or customs unions. Tariff preferences were biased toward costly trade diversion based on regional import-substitution strategies instead of increased competition between domestic producers and regional suppliers. Distributional conflicts broke out in most regional schemes as less developed partners began to view themselves as net losers from integration. These countries then either imposed unilateral import restrictions to intra-regional trade or demanded substantial compensation. Nor did the regional integration schemes lead eventually to increased trade outside the region--the training ground argument for opening markets to regional competition. Nor was success much greater in achieving other, more modest goals. Clearing and credit arrangement cured symptoms, at best, while failing to contribute to savings in foreign exchange or to more balanced intra-regional trade. Regional industrial planning, designed in some schemes as a complement to integration and in others as a substitute, failed to take off as well. Most projects were never implemented and the remainder collapsed after a short time under the weight of disputes over management, location, financing, and purchase guarantees.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 13 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.