Global Politics of Regionalism

Theory and Practice

Mary Farrell, Björn Hettne, Luk Van Langenhove

• Publisher: Pluto Press
• Year: 2005
• Print ISBN: 9780745322629
• eBook ISBN: 9781783718405
• Edition: 1
• Topic: Biological Sciences
• Subtopic: Science General
• Index: Biological Sciences

This book explores the phenomenon of regionalism. In a seeming contradiction to globalization, there is a growing tendency for countries to enter into regional arrangements as a response to the pressures of operating in a global marketplace. But regionalism is also emerging as a phenomenon in its own right, serving distinct purposes and taking different forms in different areas. The contributors explore how these patterns impact on wider issues such as global governance, democracy and trade. The book reviews the major theoretical approaches to regional cooperation including perspectives from international relations, political economy, economics and sociology. It is divided into three main sections: theoretical approaches to regionalism; issues of regional cooperation (such as security, monetary issues, identity and integration); and an exploration of specific case studies including the Middle East, Africa, the Americas, China, Europe, Asia and the Pacific. With an international range of contributors, including Bjorn Hettne, Louise Fawcett and Andrew Hurrell, this in-depth and multi-disciplinary guide will be of interest to students across the social sciences and to the wider policy community.

1

The Global Politics of Regionalism: An Introduction

Mary Farrell

The early years of the twenty-first century have witnessed an intensification in regionalism across the globe. Just over a decade after one of the late twentieth century’s defining moments, the collapse of the Soviet Union and the end of the Cold War, the contemporary world is characterised by a dual movement of integration and fragmentation. With the end of the former Soviet empire and the collapse of one of the post-war superpowers, in its wake came new states moving towards democracy, some by accession to the European Union (EU).

Elsewhere, renewed interest in regionalism has seen even reluctant actors move towards deeper cooperative arrangements and enhanced integration with neighbouring countries through either formal or informal institutional frameworks. One example of a region that overcame its historical reticence towards cooperative decision-making and shared sovereignty is that of the ASEAN region (Association of Southeast Asian Nations) – motivated in part by economic difficulties that many of the member countries experienced in the wake of the 1997 financial crisis. In Africa, similar moves were underway across a continent that had flirted with regional cooperation for over three decades and during this time had seen the overlapping membership of many countries in several regional organisations fail to achieve economic development in what remained the world’s most impoverished region.

In the face of growing poverty, the spread of diseases such as AIDS and malaria, and almost total marginalisation in the world economy, donor aid fatigue and the general endorsement of neoliberal economic policies on the part of the international institutions, a number of African leaders began to recognise the virtue of regional and sub-regional cooperation as a possible route out of the malaise that affected the entire continent. Thus, the idea of pan-African unity put forward by Kwame Nkrumah, Ghana’s first post-independence leader, was re-endorsed once more in the vision of an African Union with the Treaty signed in 2001. Almost simultaneously, the announcement of the New Partnership for Africa’s Development (NEPAD) suggested a rush towards cooperation among the African countries that was far removed from the leisurely pace of political and economic interaction in the wake of independence. Suddenly, the continent was hit by a spate of new initiatives, and the revival of dormant agreements as the African countries awoke to the realisation that globalisation had not brought any discernible benefits to either individual countries or the continent at large. The best option available seemed to lie with collective action in the form of enhanced regional integration, to foster formal, institutionalised cooperation alongside the informal cross-border initiatives emerging through public and/or private activity under micro-regionalism.

This volume starts from two premises. The first one is that regionalism is a response to globalisation and a reaction to the diverse aspects of global processes in their entirety. As indicated in much of the literature, globalisation is a many-faceted phenomenon, eliciting both positive and negative impacts for countries, and the latter have the opportunity to respond through regionalism as both a defensive and an offensive strategy.

The second premise is based upon the recognition that regionalism emerges from the internal dynamics of the region, and the motivations and strategies of regional actors. Just as there are many models of regionalism around the world, with no dominant paradigm to which all countries and regions subscribe, so too we can find a degree of diversity in how regionalist processes are understood and conceptualised in the literature. As Louise Fawcett has suggested, ‘there is no commonly accepted view of the “the new regionalism” nor indeed of its place in any evolving international order. The debate on regionalism remains very much an open one’ (Fawcett and Hurrell, 1995, 36).

Yet the regionalism processes so clearly evident in Europe, Asia and Africa did not suggest the generalisation of any particular model, least of all the European model which is often regarded as a benchmark for regional integration. As the chapters in Part Three of this volume clearly show, distinct patterns and forms of regionalism have emerged and continue to develop their own particular rhythm across the world. Shaped in part by the internal regional dynamics on the one hand, and on the other by external pressures such as globalisation, instability, security threats (both external and internal) and increased competition which affected the behaviour and strategies of both economic and political actors, regional actors sought solutions to common problems through collective actions and decision-making to foster enhanced regionalism.

One broad feature of regionalism discernible in the studies presented here is the diversity of practice that is evident in different parts of the world. A second consideration is the mixed record of success apparent in different regional groupings. An interesting and indeed intriguing question is why some countries fail to engage in successful cooperation, why some cases of regionalism make little progress beyond the initial stage of signing the treaty that is intended to form the basis of future interactions between the political and economic actors of the signatory states.

Related to the question of success or failure of regionalism are the attitudes towards cooperation by individual states, and the motivation to go ahead with this kind of policy or to reject it outright. Economic and political motivations certainly play their part in the actions of actors; however, the importance of identity and self-perception should also be recognised and this is underscored in several of the chapters in this volume (including those by Pastor, Slocum, and Zhang).

GLOBAL FORCES

Globalisation has become one of the most-talked about phenomena of the second half of the twentieth century. The theme has spawned almost an entire industry in itself as the academic community latched on to this phenomenon, catching the attention of such disciplines as economics, political economy, sociology, cultural theory, and a host of multidisciplinary analyses.

What were the causal forces, and the actual and potential effects of globalisation? These two key questions have been earnestly examined in the large (and still growing) volume of literature on globalisation. While the causes of globalisation are many and varied, there is a general consensus on the role that new technologies, the strategies of multinational corporations, and state policies and preferences for liberalisation have played as combined driving forces. The international institutions have also been instrumental in promoting globalisation, not least the programmes and policies of the International Monetary Fund and its sister organisation, the World Bank, together with the General Agreement on Tarrifs and Trade and its successor, the World Trade Organisation.

A third question, and ultimately the most important consideration, is how can governments and societies respond to globalisation? What are the options available to governments in a world where national boundaries are criss-crossed by mobile (and volatile) capital flows, by an increasing volume of trade (and the competition that comes with it), and by a growing influx of people from third countries, some in search of economic opportunities and others in flight from persecution, war or famine?

These flows of capital, trade and people characterise the contemporary phase of globalisation. For some countries, and some groups, the interconnectedness that results from international trade, global capital mobility, and the movement of people in search of new opportunities constitutes a positive outcome that is broadly welfare enhancing. However, there is another side to globalisation with less welcome effects – international activities (and the interconnectedness that we have referred to above) can be found in the less salubrious areas of transnational criminal activities, the drugs trade, people-trafficking, terrorism and illegal arms trafficking. The latter activities have been frequently associated with the weakening of national borders in general, and the limitations on the capacity of weak states in particular. In many of the latter, internal conflict and ethnic rivalry have added to national instability, while economic and political crises offered emigration as the only viable option for survival.

Although we can broadly identify the driving forces, and the architects of globalisation, it has become very clear that the processes of globalisation, once unleashed, have generated mixed results for countries at all levels of development. Not all groups and societies regard globalisation as the unmixed blessing its supporters would suggest. Recent years have seen critical opposition to globalisation growing, with voices being raised among social and consumer groups, environmentalists, certain business interests, and trade unions. Even states have come to regard globalisation with a degree of wariness, mindful of domestic interests clamouring for protection on the one hand, and of the actual or perceived threat to the state’s autonomy on the other hand.

Since the world has been unable to construct a truly global governance system, one that is comprehensive in scope and with the capacity to manage and regulate (including the possession of a legal enforcement capability underpinned by political legitimacy), the states have turned to other forms of cooperation at the regional level in order to deal with common problems and shared interests.

In a world where the Westphalian state system faces a barrage of attacks to its sovereignty and authority, governments have come to view cooperative decision-making as a crucial means to strengthen that sovereignty and to exercise shared authority in the framework of regional cooperation. Almost simultaneously, non-state actors have also engaged in an extensive network of cross-border relations – in such diverse fields as economy, environment, society, education, and even healthcare. Mention has already been made of the non-legal interactions and criminal activities that operate on an increasingly international level, constructing international and global networks that are therefore beyond the jurisdiction of national legal systems and outside the reach of national law enforcement agencies.

Substantial cooperation has emerged among democratic countries, partly out of necessity and partly driven by the political strategies of the countries involved (Slaughter, 2004; Solingen, 1998). In the contemporary world, much of this cooperation is prompted by concerns over such issues as crime, terrorism and counter-terrorist policies. There is of course the risk that these issues come to dominate the international agenda to the exclusion of broader concerns related to human welfare.

Long before the events of 11 September 2001 provided the opportunity for the launch of an international agenda based upon one overriding concern, the fight against international terrorism (however ill-defined), governments, public officials and non-governmental actors were coming together across borders to solve common problems – in trade, financial regulation, peace settlement, security management, and economic development.

The building blocks for both formal and informal cooperation have been in place for some time, in most of the regions across the globe. Of course, there are differences in terms of how these building blocks of cooperation have been put together, and what sort of regional community is emerging. The next sections elaborate on the conceptual diversity of regionalism, and highlight the range of approaches used in this volume.

FROM TRADE TO MONEY

The very nature of regionalism is one of great diversity, as the examples presented in this volume indicate. Perhaps not surprisingly, the theoretical literature is also characterised by the diversity of perspectives, with disciplines such as economics, political science, international relations (and their sub-branches) all contributing their respective analytical frameworks to explain how and why state and non-state actors cooperate across the traditional nation-state boundaries.

Even less surprising than the wide range of multidisciplinary perspectives is the reality that accompanies it, in the often-limited communication between the disciplines. While it is undeniable that true interdisciplinarity can be extremely difficult to attain, there is no reason why separate disciplines cannot undertake a discourse or the practitioners engage in cross-disciplinary discussion of processes that each is individually interested in describing and studying.

For economists, the point of departure is the set of economic linkages formed through trade in an integrated area, where the removal of tariffs and non-tariff barriers is expected to produce significant increases in overall economic welfare for the countries involved, even if the gains are unevenly spread across economic sectors and societal groups. The seminal work in the early 1960s by Bela Balassa encouraged economists to engage in further explanations of the different forms (or levels) of economic integration, and the likely impact of tariff liberalisation in such areas as competition, structural change, scale economies and levels of investment. Economic integration produces a shift in trading patterns, with the participating countries (and their industrial firms) switching from prior trading partners to new partners within the integration area.

As Gavin and De Lombaerde point out in Chapter 5, contemporary forms of regional economic integration have become more complex than the Balassa model originally suggested, since effective trade liberalisation will require even more regulatory reforms by the participating governments, extending beyond the narrow area of trade/commercial policy to include harmonisation of standards, redistribution policies, and greater consideration of how to manage the tendency for concentration of economic resources (especially finance, labour, and production facilities).

The theory of regional economic integration focused on trade or money, often indeed dealing with one or the other separately. More recently, economic and political economy perspectives have begun to consider the combined effects and issues arising from economic and monetary integration. Implicit in economic (i.e. trade) integration is the movement towards an integrated market whose spatial dimensions extend across several national boundaries. For many analysts, the creation of a single market calls forth the need for a single monetary unit, to reduce the transaction costs of using competing currencies in a unified trading area.

Initially, the theoretical work on monetary integration concentrated upon the question of the optimum size of the monetary union. The puzzle was a real issue of concern for theorists and policy-makers, the latter in particular since the exchange rate had been the traditional instrument of policy available to governments for use when the economy suffered an economic disturbance out of line with the economic trends in the trading partners (economies).

In cases where capital and labour were not so mobile as to effect an adjustment to counteract the effects of economic crisis, then an adjustment of the exchange rate would serve to retain competitiveness. Monetary integration among a group of countries means that any individual country loses the possibility to use the exchange rate as an instrument of economic (monetary) policy. Problems arise when economic conditions are diverse across the integrated area, and a one-size-fits-all monetary policy may be unsuited to the particular conditions in a given country. Chapter 5 outlines the complications arising from monetary integration, and the different implications for policy-makers.

Interestingly, the traditional approach of trade integration followed after some time by monetary integration (as happened with the European experience) is not being adopted in other parts of the world. The question of whether trade integration should precede monetary integration is one that has been raised, but not answered conclusively or definitively. In Chapter 8, Cuyvers et al. portray the diversity of positions on exchange rate policies taken by governments across the world, against the background of a global capital market.

Many regions have sought to counter the uncertainties that a volatile global capital market can produce by cooperating in exchange rate arrangements and, as Chapter 8 clearly indicates, there remains a great diversity of arrangements that operate with varying degrees of success. Above all, however, these diverse arrangements can be categorised in two broad approaches: at one end of the spectrum, governments decide on flexible exchange rates while, at the opposite end, the decision rests on a choice of linking the currency to a hard peg – an extreme case being the use of an external currency (most often the dollar) as the currency of choice in the domestic economy.

POLITICAL SCIENCE MEETS INTERNATIONAL RELATIONS

In the literature it is common to find academic studies categorised according to two waves of regionalism occurring over the period since the Second World War (Breslin et al., 2002). The first wave of studies emerged in the 1950s, coinciding with the appearance of the European Coal and Steel Community (ECSC) and the European Community. An influential body of scholars, including Ernst Haas and Leon Lindberg, drew upon earlier work by the functionalist writers such as David Mitrany, to develop the neo-functionalist theory of integration (Rosamond, 2000). After a period of doubt over the predictive capability in the mid-1970s and the slow progress towards integration in a Europe that was suffering an unprecedented economic crisis accompanied by stagflation, neo-functionalism returned to popularity in the 1980s with the resurgence of integration under the Single Market Programme, and European monetary union.

Neo-functionalism explained the process of integration as a set of functional (i.e. economic) spillovers, leading to economic and political integration, with actors transferring their expectations, and loyalties to a supranational central authority. Important elements in the theory included the role of political actors (national and supranational), and the transfer of expectations to a supranational institution that would be expected to meet the d...

Table of contents

• Cover
• Title page
• Copyright
• Contents
• Preface
• List of Abbreviations
• 1 The Global Politics of Regionalism: An Introduction
• Part One Theoretical Approaches to Regionalism
• Part Two Key Issues in Regional Cooperation
• Part Three Mapping Regional Approaches
• Part Four Conclusion
• Bibliography
• Notes on Editors and Contributors
• Index