Regionalism in South Asia

Negotiating Cooperation, Institutional Structures

Kishore C. Dash

• Publisher: Routledge
• Year: 2008
• eBook ISBN: 9781134084524
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: International Relations
• Index: Politics & International Relations

The dramatic surge in regional integration schemes over the past two decades has been one of the most important developments in world politics. Virtually all countries are now members of at least one regional grouping. South Asia is no exception to this trend. In December 1985, seven South Asian countries came together to establish South Asian Association for Regional Cooperation (SAARC) to address issues of peace and development in the region. This book examines regionalism in South Asia, exploring the linkages between institutional structures, government capabilities, and domestic actors' preferences to explain the dynamics of regional cooperation. It considers the formation and evolution of SAARC, explaining why its growth in terms of institutional developments and program implementation has remained modest and slow over the past two decades. It also addresses the impact of important issues such as the acquisition of nuclear capabilities by India and Pakistan, the unending conflicts in Kashmir, the war against global terror in Afghanistan, and India's growing economy. Drawing on a wealth of empirical research, including elite interviews and trade transaction data, this book sheds new light on the main cooperation issues in South Asia today and provides important information on the trends and prospects for regional cooperation in future years.

1 Introduction

Revival of regionalism

The dramatic surge in regional cooperation schemes in the post-1980 period has been one of the most important developments in world politics. Significantly, countries like the United States, Canada, Japan, and China, which showed little interests in regionalism in the post-World War II period, have embraced regionalism with considerable enthusiasm in the post-Cold War era.¹ What accounts for this recent spurt in regionalism? At least four developments seem to have come together in the late 1980s to create a momentum toward regionalism: expansion of European integration; the demise of Soviet Union; the shift in US strategy; and changing perspectives on regional trade and foreign investment in the developing world.

Unlike the “locust years” of disillusionment in the 1970s, during which regional integrative activities declined in Western Europe (Euro-sclerosis) as a result of the revival of nationalism (Clark 1988: 1424–1425), the late 1980s witnessed several new integration initiatives in Europe. The continued expansion of the European Union in terms of scope, depth, and geographical area is a significant achievement.² This success has had a demonstration effect, encouraging emulation of regional integration initiatives in other parts of the world.

A related development during this time was the end of the Cold War and collapse of Soviet Union. This led Eastern European and Baltic countries to embrace democracy and capitalism. Western Europe entered into several regional economic arrangements with these countries to accelerate their transition. Such moves increased the appeal of regionalism as an instrument of economic development and political transformation.

The decision of the United States to embrace regionalism in the post-Cold War era, as Bhagwati (1992: 535–555) argues, has been an important driving force for the growth and success of “second regionalism.” The changed attitude of the United States toward regional integration, from active hostility to broadly enthusiastic support, has both fostered regional integration schemes and reduced the diplomatic pressure for countries from engaging in the formation of regional schemes. The shift in the US policy was partly driven by its frustration with the slowness of the multilateral process and partly by its desire to gain increasing access to large regional markets.

The formation of the European single market and North American Free Trade Agreement (NAFTA) led to apprehension among the developing countries that the major centers of economic powers—notably Western Europe and North America—may form trading blocs and pursue protectionist policies.³ Such policies would, many developing countries feared, prevent their effective participation in the global economy and hamper the prospects of their national development (Hveem 1989: 269). In such a situation, their aspirations for economic development would perhaps be best realized through some kind of regional cooperative arrangements among themselves (Gilpin 1987: 294). The regional arrangements, many policymakers of these countries reasoned, would provide them more secure access to regional markets.

Growth of regional cooperation among the developing countries appears to have been guided by what Ernst Haas (1990: 65) called an “ideology of pragmatic antidependency” which seeks to promote regional interdependence among the developing countries without delinking them from the global system.⁴ Through increasing intraregional trade, the Third World countries aspire to achieve “structural empowerment” (Mortimer 1980) and, thus, hope to reduce their degree of dependence on the North and at the same time increase their collective bargaining in the global economy (Hettne 1992: 198).

A logical prerequisite for the success of pragmatic antidependency was that countries in the developing regions had to implement trade liberalization policies. To do so, they had to abandon their inward-looking domestic-oriented import-substitution model, which had dominated thinking in the 1960s and 1970s, and, instead, embrace an outward-oriented market liberalization model. The examples set by the phenomenal success of the East Asian “tigers” and the collapse of the Soviet system validated the market liberalization model of development. The pro-market philosophical shift in the 1980s became the basis for a growing number of free trade agreements (FTAs) among developing countries and between developed and developing countries (Frankel 1997: 10).

One of the important goals of economic liberalization and trade liberalization policies in many developing countries is to attract more foreign investment and technology. The success of these policies requires regional stability, which would make the region more attractive for foreign investors by reducing geopolitical risks. Policymakers in many developing countries believe that regional cooperative arrangements can help achieve such goals. Through regional cooperation, the developing countries also desire to help neighboring countries stabilize and prosper for altruistic reasons and to avoid spillovers of unrest and population (Schiff and Winters 2003: 9). Thus, in the post-Cold War era, forming regional cooperation schemes and FTAs have become a pragmatic goal for many developing countries.

Finally, from a policy coordination point of view, regionalism appears more practical and feasible than global cooperation. Balancing divergent interests and a coordination of policies is easier among relatively few partners than among a large number of member states at a global level as represented by GATT/WTO. Developing countries are also convinced that regional cooperation can build upon existing cultural, economic, or even security ties between neighbors. A global option does not present this dynamic.

Regionalism in South Asia

South Asia is no exception to such worldwide trends. After more than eight years of negotiations, seven South Asian countries—Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka—came together in December 1985 to form the South Asian Association for Regional Cooperation (SAARC). The formation of this regional association represented a major diplomatic initiative by the South Asian leaders to address the issues of peace and development in the region. But since its origin, SAARC has experienced only limited growth in terms of institutional developments and program implementation. This has led some observers to argue that the organization is likely to experience what Ernst Haas describes as “turbulent nongrowth” in coming decades (1990: 109–125). According to Haas:

Turbulence in an organization’s life refers to a phase where participating actors are utterly confused about the goal and purpose of the organization, pursue many objectives simultaneously as they are unsure of the trade-offs among them, and demonstrate ambiguity and lack of commitment in any negotiation.

(1990: 111)

“Nongrowth is characterized by stable or shrinking budgets, the failure to acquire new tasks, low morale, and failure to recruit needed personnel” (Haas 1990: 109). When non-growth occurs in a setting of turbulence, the organization experiences “turbulent nongrowth,” which over a period of time leads to either the demise or the reevaluation (replacement) of the organization.

Some other observers, however, argue that SAARC may not be a panacea to the region’s problems, but its existence has certainly provided an opportunity for the policymakers and other techno-economic experts of South Asia to meet regularly and hold informal discussions on important bilateral and regional issues at the highest level. These informal discussions among the leaders have, at least, opened doors for improved relations among the South Asian countries. What lies ahead for SAARC? What are the prospects of deeper regional cooperation in South Asia? Given decades of mutual hostility and distrust, will South Asian leaders be able to pursue deeper regional cooperation that involves taking concrete initiatives to strengthen the existing regional arrangements and building new regional institutions to achieve mutual benefit?⁵

This book analyzes the prospects of deeper regional cooperation in South Asia by linking the process and outcome of regional cooperation with domestic politics. Understanding the prospects of growth of regional cooperation, I argue, requires an examination of the domestic system, different domestic sources of motivations of the policymakers, and various kinds of domestic institutional constraints and opportunities that policymakers usually face while pursuing regional cooperation policies. Such an examination will address two fundamental questions about regional cooperation. First, why do governments form or join regional arrangements? Second, once a regional cooperation scheme has been launched, what forces drive the process further and determine the chance of sustained growth? Focusing on the interrelationship between domestic politics and regional cooperation policies, this book argues that the interaction of the domestic actors’ (both political and societal actors) preferences within the context of their domestic institutional structures determines when expansion of regional cooperation is possible and what its terms will be. This book seeks to link the nature of the institutional structures, government capabilities, and domestic actors’ preferences to explain the dynamics of regional cooperation in South Asia.

While there is no dearth of books and articles on country specific studies in South Asia, and studies related to India–Pakistan rivalry, very few systematic studies are available on South Asian regional cooperation. Besides, the existing studies on regional cooperation in South Asia have focused mostly on historical analyses and interpretation, structural economic, and security analyses. Studies related to different domestic sources of motivations of the policymakers—for example the nature of domestic institutions, various kinds of domestic institutional constraints and opportunities, domestic actors’ support or opposition to regional cooperation policies—have received inadequate attention. It is necessary to understand the dynamics of domestic politics and domestic actors’ preferences in order to explain why or why not South Asian countries seek to deepen regional cooperation.

This introductory chapter is organized as follows. First, I provide a review of the major schools of integration theory and suggest why these theories offer only partial explanations of the regional cooperation process. Second, I identify several important implications of Euro-centric focus of the integration literature for understanding regional cooperation efforts in Third World regions. Third, I provide a brief preview of the analytical arguments of this study and introduce the organization of this book.

Theoretical approaches to regional integration: a review

Transactionalism

One of the early theories of regional integration, transactionalism (or communications theory), was developed by Karl Deutsch, the Czech-born German political scientist. Deriving his paradigm from cybernetics and information theory, Deutsch developed a communications approach to address the issue of community building in the international arena. His most substantive contribution to integration theory is found in his pioneering work Political Community and the North Atlantic Area (1957). In this book, he defined integration as “the attainment, within a territory, of a sense of community and of institutions and prac-tices strong enough and widespread enough to assure, for a long time, dependable expectations of peaceful change among its population” (Deutsch et al. 1957: 5). By “peaceful change,” Deutsch refers to “the resolution of social problems, normally by institutionalized procedures, without resort to large-scale physical force” (1957: 5).

The central objective of Deutsch’s theory was to develop a political community to avert war and thus enhance the prospect of peace and prosperity among nation-states. In contrast with Durkheim’s pessimistic construction of world society,⁶ Deutsch believed that people can learn to give up their narrow parochial orientations and form organizations to promote peace (1978: 285). Deutsch’s effort, as Arend Lijphart (1981: 236) perceptively remarks, revived significantly the Grotian paradigm of world society, which challenged the traditional paradigm of international relations. Traditional international relations theory revolved around the notions of state sovereignty and its logical corollary, international anarchy. Such notions reflected the Hobbesian paradigm, which underlined the fact that nation-states live in an international state of nature with no guarantee of security. Thus, they are forced to survive in a condition of mutual competition and conflict. Challenging this axiomatic view of the relationship between anarchy and war, Hugo Grotius and his followers claimed that the world consists of a society of states with a common framework of moral and legal norms and that “the normative consensus of international society is sufficiently strong and pervasive to render the image of the state of nature, at least in the Hobbesian sense of international anarchy, inapplicable” (Bull 1966: 51). Deutsch’s analysis of political communities seems to be in line with this paradigm.

According to Deutsch, political communities can be of two types: pluralistic security communities and amalgamated security communities. An amalgamated security community exists whenever there is “formal merger of two previously independent units into a single larger unit with some kind of common government after amalgamation … with one supreme decision-making center” (1957: 6). Deutsch cites the United States as an example. Alternatively, a pluralistic security community exists when nation-states retaining the legal independence of separate governments and maintaining their separate national identities pursue common goals and harmonize their policies to achieve joint economic rewards. Of these two communities, Deutsch observes, the pluralistic security community is easier to attain and maintain. He further suggests that for the creation of both kinds of communities, changes in the political attitudes and behavior of individuals, in other words, development of a “we feeling,” are absolutely necessary. According to him, through transactions such as trade, migration, tourism, cultural and educational exchanges, and the use of physical communication facilities, a social fabric is built not only among elites but also the masses, instilling in them a sense of community or a “we feeling” (1957: 29).

To Deutsch, the success of integration is linked to the development of a “sense of community” among nation-states. To measure this “sense of community,” he and his associates quantified transaction flows—such as mail flows, electronic communication, student travel, tourism, and relative levels of intraregional trade—among nation-states. On the basis of aggregated data on social communications and public and elite opinion, Deutsch and his colleagues (1967) concluded that the process of European integration, at least in the sense of the growth of supranational state or sense of community, had come to a halt. They observed that integration in Europe was at its peak in 1954; integration reached a plateau from 1957 to 1958 and from then on integrative trends declined (218).

Deutsch’s conclusion, however, was challenged by Inglehart and many other scholars. Using identical data, Inglehart (1968) found out that regional integration in Europe, rather than declining, was progressing toward a fuller integration during the same time period studied by Deutsch and his associates (122). Sharing Inglehart’s view, Lindberg (1970) commented that Western Europe, during the five-year period after the formation of European Economic Community (EEC) in 1958, experienced substantial progress toward integration (24). Carl J. Friedrich (1969), using other indicators, concluded that Western Europe had become more integrated since 1957, the year of the signing of the Rome Treaty, creating the Common Market. He criticized Deutsch and his associates both for their choice of indicators and for their use of statistical data in supporting their conclusion (196–215).

Ernst Haas (1958) found Deutsch’s paradigm inappropriate to account for the emergence of the European Coal and Steel Community (ECSC). Haas argued that if one had to consider Deutsch’s transactionalist criteria to gauge the level of regional integration in Europe, then ECSC would not have come into existence, because the six countries were not enjoying a high level of transactions among themselves. Haas also did not find Deutsch’s three qualitative indicators—mutual predictability, mutual responsiveness, and value compatibility—useful in case of ECSC. Instead, Haas argued that political leaders and their expectation of mutual economic gains played crucial roles in the emergence of the ECSC.

These criticisms led Deutsch to reevaluate his conclusions about European integration from 1954 to 1967. In a subsequent study with Richard Chadwick (1973), Deutsch reported statistical errors for measuring relative trade concentration [relative acceptance (RA) indices], which led to his earlier conclusion that European integration has reached a plateau in the mid-1950s. Instead, the study of Chadwick and Deutsch (1973: 84–109) suggested that steady growth in the EEC had occurred since 1954–67.

Despite these revisions, many critics remained unconvinced about the applicability of Deutsch’s transactionalist framework in the 1970s and 1980s. The major weakness of this approach was that Deutsch’s emphasis on quantitative measures of transaction flows led him to ignore other critical international and domestic political and economic factors in the decision-making process. His analysis neglected the role of international organizations, structural dynamics of state power, and the self-interested national decision-makers. By focusing on quantitative transaction flow indicators to measure structural integration in Europe, his study paid inadequate attention to various international and domestic constraints and opportunities that policymakers face in pursuing integration policies. This was a major deficiency of Deutsch’s transactionalist approach, which was criticized by scholars of neo-functionalism and intergovernmentalism.

Functionalism

Functionalism, as developed by Hungarian political economist David Mitrany (1966), rests upon two central assumptions. First, political divisions are a source of conflict among nations. Nation-states can transcend these divisions gradually by seeking out areas of mutual interests and establishing a “working” web of international institutions, managed by technical elites. Second, in today’s interdependent world, no nation-state can individually solve all its economic and social problems. Hence, there is a need to identify common international economic and social problems and to create regional and global organizations to deal with them.

However, Mitrany did not favor an organization like the League of Nations, which failed, according to him, because of its all-encompassing nature and overemphasis on military issues. Instead, he argued for monofunctional or functionally specific organizations because they can address a single international problem and strive for its ultimate solution. Technical experts, rather than political actors, Mitrany believed, will play a vital role in these functional organizations. Once people are able to perceive increased benefits and the greater ability and efficiency of these organizations, demands will be raised for the solution of other problems with other functionally specific organizations. This process, known later as “spillover”⁷ or what Mitrany calls “the doctrine of ramification,” will result in “ever-widening circles” of soci...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• List of figures
• List of tables
• Acknowledgments
• Map
• 1 Introduction
• 2 Explaining regional cooperation in South Asia
• 3 Regional dynamics
• 4 Origin and evolution of SAARC
• 5 The challenge of regionalism in South Asia
• 6 Domestic politics and regional economic cooperation in South Asia
• 7 Domestic preferences for regional cooperation: cross-national comparisons
• 8 Conclusion
• Notes
• Bibliography