Embedded mercantilism and open regionalism: The crisis of a regional political project

Abstract

This paper advances the argument that moves towards regional integration need to be understood as 'regional governance projects' undertaken by domestic actors and coalitions. Regional political projects--such as open regionalism--have roots in domestic structures, and it is this which defines the broad configuration of the regional political economy. On the basis of this framework the paper suggests, first, that the strategy of open regionalism was contingent on a particular configuration of power and interests in the domestic and external economy (embedded mercantilism). Second, this system of embedded mercantilism depended on a set of domestic coalitions between tradeable and non-tradeable sectors of the economy. The non-tradeable sector in Southeast Asia was entrenched within a particular system of political patronage. Third, the Asian crisis and other structural changes in the international economy have made these domestic coalitions less sustainable, thereby creating opportunities for new forms of regional governance projects.