WORKING GROUPS on REGIONAL REGIMES

 
        PARTICIPANTS
Rachel Brewster  University of North Carolina, Chapel Hill
Susan Glover  University of North Carolina, Chapel Hill
Chris Harrison University of North Carolina, Chapel Hill
Liesbet Hooghe  University of Toronto
Daniel Kono  University of North Carolina, Chapel Hill
Scott Littlehale  University of North Carolina, Chapel Hill
Gary Marks University of North Carolina, Chapel Hill
Thomas Oatley University of North Carolina, Chapel Hill
David Scott  University of North Carolina, Chapel Hill
Roland Stephens  North Carolina State University
Richard Stubbs  McMaster University
 

INTRODUCTION
 

This working group met three times over a two year period from 1997 to 1998 with the goal of producing a series of papers (and possibly an edited volume) on regional regimes. Our goal was to provide a unified theoretical framework for studying RTAs and to apply this framework to a variety of cases, including NAFTA, the European Union, MERCOSUR and ASEAN.  Our discussions thus revolved around the search for a parsimonious yet broadly applicable framework. 

Our point of departure was that regional regimes are determined by domestic political factors, including above all, the electoral consequences that they entail for national governments. We conceptualized  the response of domestic actors to institutional change in regional regimes as a constraint on the reform strategies of political leaders along two main lines:

1) First, they pose some distribution of economic benefits and costs.  They do this by lowering tariffs (or non-tariff barriers) or otherwise reducing transactions costs (i.e. creating a legal framework to enhance compliance to legal norms among trading parties). The resulting pattern of economic effects can be understood as a combination of two causally distinct phenomena: a) small aggregate welfare changes resulting from increased specialization, efficiency gains, price declines, and increased international bargaining leverage which are widely diffused within the society as a whole, alongside a more concentrated pattern of larger costs or benefits for a particular group or groups resulting from the elimination (or more rarely, the imposition) of rents.  The interplay of these two effects shapes the political world in which politicians frame proposals for institutional change, as we explain below.
2) Second, regional regimes have positional consequences.  That is to say, they alter power relations among domestic actors. To the extent that a regional regime reduces trade barriers, this will privilege mobile factors of production at the expense of immobile factors of production.  By deepening market competition within a territory segmented by the continued existence of multiple authoritative political systems, a regional regime allows mobile factors of production to shop around for the most favorable rule settings. National governments will be induced to cater to the productive assets they most fear losing.  Institutional settlements that reflect pre-existing power relationships, such as corporatist agreements between capital and labor, national systems of industrial relations, or state welfare systems, will be undermined by exogenous power shifts. Such anticipated shifts will engender a predictable pattern of costs and losses for particular groups. 
The project produced the following series of individual papers: 


  • Rachel Brewster and Roland Stephens produced a paper explaining variation in RTA    dispute-resolution mechanisms.
  • Susan Glover and David Scott wrote a chapter explaining the formation of the South African Development Community (SADC) and the Economic Community of West African States (ECOWAS). 
  • Scott Littlehale's chapter provided a theoretical explanation for labor organizations' attitudes towards NAFTA, as well as statistical findings on Congressional support for NAFTA and Fast Track legislation. 
  • Chris Harrison examined the incentives for Argentinian and Brazilian governments to participate in the South American Common Market (MERCOSUR). 
  • Thomas Oatley's chapter explains why governments forming the European Community chose to create a customs union rather than a broader free trade area. 
  • Finally, Richard Stubbs's chapter examines the formation of the Association of Southeast Asian Nations (ASEAN).

These papers may eventually be published and will constitute the focus of subsequent working group meetings.  What follows is a review of literature relevant to regional regimes. Intended as an introduction to a volume on this topic, this review may serve as an introduction to the subject.  It indicates what ground has been covered and what remains to be done if we are to understand RTA formation.

 Link to: "Literature Overview: Regional Regimes"  byDaniel Y. Kono