Explaining regional integration outcomes

Abstract

Perhaps the most striking fact that emerges from a close study of various integration schemes, past and present, is their wide range of outcomes. At one extreme, the highly successful European Union has managed over the past forty years to establish an array of institutions and policies, as well as a broad and clearly defined set of rules. At the other extreme, projects such as the Latin American Free Trade Association, the Andean Pact, and the Economic Community of West African States failed to make any progress towards integration. Between these polar cases are a few integration projects with mixed results. What explains variation in integration outcomes? The study argues that two sets of conditions must be specified in order for integration to succeed, namely, demand side and supply conditions. Regional groups that satisfy both demand and supply conditions stand the greatest chance of succeeding, whereas groups that fulfill neither set of conditions are least likely to attain any significant level of integration.