What are Regional integration advantages and disadvantages?

Answer 1

I assume you are referring to some form of political-economic union here, such as the European Union model? If so, then my answer applies. Broadly speaking, regional integration aims to improve economic outcomes for all participants involved, although in practice not all participants achieve the same degree of benefit. Oftentimes, economic integration- a process whereby nations promote free trade and usually create institutions to streamline economic cooperation- is followed by political integration as well. For example, today's European Union is a product of the European Community, which itself was a product of the European Coal and Steel Community of 1954, a largely economic regime that eventually led to evolution towards political integration with the latter two. In theory, regional integration is hailed as a way to maximize economic outcomes for all participants, but in practice some problems do arise. Some of these problems include, but are not limited to: -Determining whether or not all participants have equal say in policies set by the regional institutions that oversee cooperation. Are there more powerful, core, states that have greater say in what outcomes obtain? -Determining how to deal with economic disruptions and/or redistribution of resources. Economic problems might affect participants unequally, such that some states will be net recipients of some form of aid while others will be net lenders of aid. One might look at NATO as an example of a multi-state institution where one major participant- the United States- is the primary donor of aid while most other states within NATO are recipients of that aid (principally economic and military). In fact, such redistributive issues are typical of all institutions where a certain benefit- sometimes a public good- is available for all but which usually requires little contribution by most. Strictly speaking, a public good is one that cannot be excluded from any who obtain that good (the "non-excludability" principle of economics), and whose use does not attenuate another's use of it (the "non rival" principle of economics). Of course, benefits gained within a regional institution are not strictly "public goods", in that the institution may, by norms, procedures, or by-laws, prevent some participants from obtaining the good (therefore allowing excludability), while the use of a finite resource such as economic aid is rival because one state's receipt means less for the rest. However, problems similar to those that involve strictly defined public goods also plague collective goods in the case of multi-state institutions. Perhaps the most prominent collective goods problem may be regarded as the "free rider" problem: states, because inducements to cooperate or threats to punish may be low, fail to provide for the collective benefit, therefore essentially "passing the buck" to other states, and most frequently to the most economically powerful participants. Citizens of large states like France, Great Britain, and Germany frequently complain that smaller states are not paying their "fair share" of the costs of the European Union. Meanwhile, smaller states may complain that they are overlooked or even disregarded because of their economically weaker status. Some forms of regional integration achieve monetary union, whereby a singular currency is issued within the region and where a central bank has monetary authority. Although delving into this aspect is beyond the scope of my answer, there are numerous- at least theoretical- problems concerning monetary union. One of the most prominent concerns unequal monetary expansion ("inflation") or contraction ("deflation") resulting from unequal growth patterns in individual states. Although such problems were very real aspects prior to the Euopean monetary union of 1999, today the most pressing problems have to do with unequal growth patterns in the participant states. Beyond economics, political integration might give rise to a whole new set of problems, including: -Determining a method of resolving political problems and/or crises; the form, control, and oversight of some form of regional managing board and/or political apparatus. -Immigration management; border crossing, policing, and national defense coordination. Political integration is more problematic on some levels than economic integration, as it necessitates some form of coordination and uniformitization/standardization among states with disparate cultures and languages. It is frequently more advantageous that the participants are homogeneous, preferaby on economic as well as political-cultural levels. If obtained, economic integration might streamline economic processes by employing the classical Ricardian notion of comparative advantage: states that are most efficient in certain processes can trade with those in which they are comparatively less efficient. This ensures that participants specialize principally in those goods and services where they are most efficient. This is not only advantageous within the zone of integration- as it helps lower costs to consumers- but also outside the zone. Participants can coordinate economic activity- at least in theory- as to promote gains for the zone abroad. On many levels, for example, we consider the European Union as an independent, singular entity even though, of course, it consists of politically independent and sovereign units. Therefore, one must always keep in mind that, unlike an integrated "model" such as the United States, where the central authority is supreme by law, regional zones and institutions consist of participants who are not strictly bound by law. It is always a possibility that in the future a member will secede permanently. In this sense, one can view each state's participation as by treaty and not by law. Although most states do not easily relinquish the requirements set forth in a treaty, they can reject some or all of its requirements, therefore making it all the more difficult to attempt to impose, via some central authority, responsibility that is not desired by participants.