Genna, Gaspare and Hiroi, Taeko. (2002) Power Preponderance and Domestic Politics: Explaining Regional Economic Integration in Latin America and the Caribbean, 1960-1997. Working Paper Series, Vol. 3, No. 1, August 2002. [Working Paper]
(From the introduction). The promotion of regional integration is one of the more significant decisions in the post-WW II international political economy. Regional integration is a process in which two or more nations within a geographical region voluntarily adjust economic and other policies to produce a fusion of their economies and political institutions. This results in a slow pooling of nation-state sovereignty in evolving supranational institutions. The variation of this pooling is wide. Large amounts of sovereignty to date have already been pooled by Western European countries in the European Union (EU). At the opposite end of spectrum, we see nations of Latin America and the Caribbean in the same process but not having reached the same level of regional integration. The purpose of this paper is to explore the conditions conducive to regional economic integration in Latin America and the Caribbean. A review of the literature points to two fundamental conditions: domestic and regional. These conditions comprise the incentives and the disincentives for the propensity of country pairs to integrate. We examine Latin American and Caribbean integration for three reasons. First, we wish to explore the dynamics of the process of integration in the developing world. Second, the western hemisphere is a unique laboratory for integration. In the latter half of the twentieth century, four regional economic integration projects emerged in Latin America and the Caribbean: the Southern Cone Common Market (Mercosur in Spanish or Mercosul in Portuguese); the Andean Common Market (also known as the Andean Pact); the Central American Common Market (CACM), which later became the Central American Integration System (SICA); and the Caribbean Community (CARICOM). (1) Due to the longevity of some projects, the off-again and on-again traits of others, the uneven pace of development of regional institutions, and the mix of different sized countries, we have a variation along many dimensions. Third, the recent discussions for the resurrection of the Free Trade Area of the Americas (FTAA) warrant an examination.
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