Regional Integration .Module of Political Science

L. 3

EU studies and new regionalism

EU studies and new regionalism

• Theoretical imperialism of EU studies?• Inherent diversity (non-comparability)• EU “uniqueness”• n=1 problem

• Or :

• More recently:

• Dialogue and cross-fertilization.

Studies on new regionalism(Soederbaum et. al 2010)

• 2 approaches to EU studies in “new regionalism” literature

• 1) taking the EU as the standard for regional integration and thus considering all non European forms of regional integration as “weak” or “failed”.

• 2)less convinced of the usefulness of comparative research and development of approaches to regionalism specifically addressed to cases of the developing world (left for case studies, area studies)

CASE STUDIES “The case study method has the obvious advantage that

the context and the specifics and nuances of each regionalization process can be more easily grasped. The method allows for ‘within-case’ analysis and process tracing, which is particularly relevant to the study of regionalization and the adjustment of actors to institutional changes.

Regional and area specialists are certainly correct in asserting that we need deep multidisciplinary knowledge of various contexts and people. The disadvantage of case studies is, however, that a single case is a weak base for creating new generalizations or invalidating existing generalizations. Hence, comparative analysis helps to avoid ethnocentric bias and culture-bound interpretations that can arise, when a specialization is over-contextualized or the area of study is too isolated.”

(De Lombaerde, Soederbaum, Van Lagenhoven, Baert, 2010, p.746)

Good reasons for comparing the EU and other regional organizations

• Comparison with EU is important because of the length and complexity of EU’s experience .

• Rather than comparing cases at the same point in time it could be useful comparing cases at similar stages of development (regionhood)

• There are some characteristics of the EU that it shares with other cases of regional integration (ex. Trade policy) some that are held only by a small number of regional organizations and some that are unique of EU (ex. EU citizenship)

The Eu as a case of regional organizations

The Eu is in some cases like all other regional organizations (at the WTO is one among many regional trade agreements notified) in other cases is like some other regional organizations (a FTA) and in certain ways (citizenship) like no other regional organization

(De Lombaerde, Soederbaum, Van Lagenhoven, Baert, 2010, 748)

Comparing regionalisms

• Hurrel (2005) • Rather than trying to understand other regions

through the distorted mirror of the EU it is better to think in general theoretical terms and in ways that draw on traditional IR theory , comparative politics and other areas of social thought.

Integrating the case of the EU in a larger discourse on comparative regionalism built around general concepts and theories.

What has to be gained from the EU –new regionalism dialogue?

• Sbragia Soederbaum (2010)

• EU theories focus mainly on endogenous factors of EU integration (such as :preferences and behavior of state- and non-state actors or of regional institutions; increasing transactions in the region)

• New regionalism approaches focus mainly on exogenous factors of integrations such as globalization

• Both EU and NR studies have to gain by a cross-fertilization of these two approaches

• W. Mattli, The logic of regional integration.Europe and beyond 1999

• Tries to develop a general theory of regional integration

• Regional integration depends on demand and supply condition

Demand factors

• As new technologies enlarge the scope of markets beyond the borders of the nation state , actors willing to gain from wider markets will try to change the existing governance structure in order to realize fully these gains.

• Actors call for reducing the costs of transactions that can be very high (ex: uncertainty about tariffs and non-tariff barriers, possible nationalizations of foreign investment by the governments ), appealing to external safeguards in form of an integrated governance structure.

(Mattli )Demand factors

• Neo-functionalism

• Neo Institutional economics (Williamson)

• Also Moravsick emphasizes that trade dependency is the main underlying factor explaining demand for integration.

What indicators for demand?Economic interdependence TRADE

ENCAPSULATION

Grieco (1997):

“the percentage of all exports by countries of an actual or proposed regional arrangement that go to other countries in the actual/proposed arrangement”(p.171).

Ex: in 1990s 60% in EC, 41% in NAFTA countries; but much less in Mercosur and ASEAN

Very used indicator.

Problem: depends on size of countries

• Demand for integration (coming disproportionately from big business) doesn’t translate into success unless it is met by supply of integration by the political leaders.

Supply conditions

• The conditions under which the political leaders are willing and able to accommodate demand for integration (sacrificing or “pooling”sovereignity ).

• Willingness depends on the perceived benefits of integration for the political leaders

Economic prosperity -No supply of integration

• Political leaders normally value political autonomy (non-interference from supranational authorities) and power (being re-elected).

• If the economies are in good conditions and their chances of been reelected are therefore high, is unlikely that they will consent to give up sovereignity : the relative gains from integration in term of domestic support are too small to justify loss of independence. Therefore they are more responsive to the groups that are hostile to integration

Economic crisis- Supply of integration

• In times of economic difficulties, political leaders are more concerned about assuring their own survival and disposed to economic policies that would enhance the state of the economy. The influence of groups hostile to integration decreases.

• Ex: in EU re-launch of SM in times of sluggish economic performance. NAFTA when Mexican and Canada’s economies were in trouble

Further supply conditions

• Leaders willing to provide integration may be unable to do so because of collective action problems.

• These problems regard preventing defection in view of short term gains (described as a Prisoner’s Dilemma) and coordinating, since a state in pursuing its own interest imposes to another states costs and benefits contingent upon the other’s policies.

Prevent defection

• In order to prevent defection and assure compliance with the new rules of cooperation a group of countries seeking integration must install

COMMITMENT INSTITUTIONS to ensure centralized monitoring and third-

party enforcement

(such as the European Court of Justice, the European Commission in

its function of monitoring the implementation of EU law)

Coordinationthe essential role of a regional leader • From: I.R. and hegemonic leadership thesis

• There must be one state

regional leader

whose membership in the cooperation is perceived by the others to be more important than the cooperation of any other.

Bears the costs associated with integration providing political-military and diplomatic resources needed; serves as a large market

• This regional leader serve as a focal point in coordinating rules regulations and helps to ease tensions among states on issues of distribution of the benefits.

• This condition according to Mattli is even more important than the availability of commitment institutions

Explaining regional integration

Following Mattli :

• DEMAND FACTORS

• SUPPLY FACTORS

• INERTIAL FACTORS

Demand factors

• Depend on higher levels of regional interdependence since transnational actors find that transborder activities are too costly and put pressure on national or supranational authorities to reduce transaction costs through cooperation coordination and eventually integration

Supply factors

• Refer to the presence of a regional leadership, ready to pay a disproponate share of the costs required by the regional undertaking or to act as monitor, enforcer and broker.

• “Regional playmasters” (as: Germany and France for the EU)

Demand factors

Limits of theories focusing on economic factors:

What are material gains of regionalism? not only increased trade. Also avoiding externalities (as produced by other regional integration: ex. US NAFTA after EU and ASEAN)

Mobilization of domestic and transnational groups presupposes liberal regimes that allow for pluralistic interest mobilization

Demand factors: also political

Milward points to the fact that nation states may seek integration to strengthen themselves.

In conditions of low economic interdependence states may seek regionalism in order to reinforce sovereignty. Weak states may be more inclined to enter regional organizations (Africa, Latin America) to boost their economic development, problem solving capabilities and international standing.

But State weakness may interfere with regionalism since too weak states may be unable to implement regional commitments.(implementation)

Supply factors

Role of regional “playmasters” powerful states .

Most regional integration cases show one (US for EU (ECCS), and then NAFTA; Germany for EU; Argentina and Brazil for Mercosur; Idonesia and Malaysia for ASEAN).

But powerful states may be reluctant to delegate authority to regional authorities (most regional organization remain intergovernmental EX: Mercosur and NAFTA)

Supply factors - diffusion

The supply of regional institutions may come from other regional and international organizations that promote regionalism providing blue-prints for region building.

Institutional similarities not explained by neo-functionalist reasoning

National governments or regional organizations may react to crises of performance or legitimacy by looking to other regional organizations which look more effective (lessons drawing) or to gain international legitimacy or signaling commitment to free trade.

Inertial conditions (historical institutionalism)

• Are demand or supply factors that become institutionalized ,locking-in previous agreement, or path dependent effects that protect integration processes even in times of declining demand or supply conditions.