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ANRV412-PL13-08 ARI 6 April 2010 19:4 ANNUAL REVIEWS Further Regionalism Click here for quick links to
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  Regionalism Edward D. Mansfield 1 and Etel Solingen 2 1 Department of Political Science, University of Pennsylvania, Philadelphia,Pennsylvania 19104; email: emansfie@sas.upenn.edu 2 Department of Political Science, University of California, Irvine, California 92697-5100;email: etel.solingen@uci.edu Annu. Rev. Polit. Sci. 2010.13:145–63First published online as a Review in Advance onFebruary 16, 2010 The  Annual Review of Political Science  is online at polisci.annualreviews.org This article’s doi:10.1146/annurev.polisci.13.050807.161356Copyright  c   2010 by Annual Reviews. All rights reserved1094-2939/10/0615-0145$20.00 Key Words preferential trading arrangements, political economy of regionalism,regionalism of national security   Abstract   We review and analyze some recent research on regionalism. We beginbydiscussinghowvariousstudieshavedefinedregionsandregionalism.Because much of the work has been conducted by economists, we thenturntoasummaryoftheeconomicsofregionalism.However,itiswidely heldthateconomicfactorsaloneareinsufficienttoexplainregionalism’scauses and consequences and that political factors are centrally impor-tant. We analyze how domestic and international political factors haveguided both economic regionalism and security regionalism. We con-clude by outlining some avenues for future research, placing particularemphasisontheneedtobetterintegrateinsightsfrompoliticaleconomy and international security in the study of regionalism. 145    A  n  n  u .   R  e  v .   P  o   l   i   t .   S  c   i .   2   0   1   0 .   1   3  :   1   4   5  -   1   6   3 .   D  o  w  n   l  o  a   d  e   d   f  r  o  m   w  w  w .  a  n  n  u  a   l  r  e  v   i  e  w  s .  o  r  g   b  y   K  o  r  e  a   U  n   i  v  e  r  s   i   t  y  o  n   0   1   /   1   2   /   1   4 .   F  o  r  p  e  r  s  o  n  a   l  u  s  e  o  n   l  y .  INTRODUCTION  During the past few decades, there has beena tremendous surge in regionalism throughout the international system. This growth has beenstimulated in large measure by the prolifera-tion of regional institutions, giving rise to sub-stantial scholarly interest in both their sourcesand consequences. Some of this work has beenconducted by economists interested in region-alism’s welfare effects and its impact on the sta-bility of the global economic system. However,there is also a long tradition of work on region-alism in political science. Scholars of interna-tional relations and comparative politics havegenerated a sizable literature on the politicaleconomy of regionalism. Researchers have alsoexpressed a lively interest in analyzing interna-tional security from a regional perspective.In this article, we review and analyze somerecent research on regionalism, sometimesreferred to as “the new regionalism” (Hettne2005). We begin by explaining that region-alism is usually understood to involve policy coordination through formal institutions.Often—although by no means always—thiscoordination occurs among states located inclose geographic proximity. Because muchof the research on regionalism focuses on itseconomic consequences, we briefly review that body of work. Then we discuss the politicaleconomy of regionalism and regionalism insecurity relations. We conclude by outliningsome avenues for future research, placingparticular emphasis on the need for work that links these two topics, improving ourunderstanding of the political economy of national security in regional contexts. DEFINING REGIONS,REGIONALISM, ANDREGIONALIZATION  Despite widespread interest in regionalism, we lack consensus on its definition. In part,this is because observers do not agree on what constitutes a region. Regions are frequently defined as groups of countries located inthe same geographic space; but where oneregion ends and the next begins is sometimesunclear. Furthermore, most researchers agreethat a region implies more than just physicalproximity, although the additional criteria that should be used have proven controversial. Among some of the best-known studies, forexample, Russett (1967) defines a region basedon geographic proximity, social and culturalhomogeneity, shared political attitudes andpolitical institutions, and economic interde-pendence. Deutsch et al. (1957) view highlevels of interdependence across multipledimensions—including economic transactions,communications, and political values—asdetermining whether a group of countriescomposes a region. Thompson (1973) arguesthat regions include states that are geograph-ically proximate, interact extensively, and haveshared perceptions of various phenomena. Althoughgeographyliesattheheartofmost of these definitions, some scholars define re-gions in nongeographic terms. Behavioral def-initions emphasize that political practice andinteraction can alter a region’s composition. AsKatzenstein(2005,p.9)putsit,“regionsarepo-litically made.” Solingen (1998) subsumes a re-gion’sboundariestotherespectivegrandstrate-gies of different domestic political coalitions. Thescopeofaregionisthusintheeyesofmem-bers of the dominant coalition. Consequently,it is subject to continuous redefinition throughexpansionintootherregionsorthroughdomes-tic coalitional shifts in grand strategy. Othernongeographic definitions that are ideationalor social-constructivist stress shared com-munal identities of states within a region(Risse-Kappen 1995; Katzenstein 1997, 2005).Inlightoftheontologicaldisagreementover what constitutes a region, it is no surprise that regionalism is also a contested concept. Onesourceofconfusionhasbeenthedistinctionbe-tween regionalism and regionalization. Variouspolitical scientists have argued that regionalismisapoliticalprocessmarkedbycooperationandpolicy coordination, whereas regionalization isan economic process in which trade and in- vestment within the region grow more rapidly  146 Mansfield  · Solingen    A  n  n  u .   R  e  v .   P  o   l   i   t .   S  c   i .   2   0   1   0 .   1   3  :   1   4   5  -   1   6   3 .   D  o  w  n   l  o  a   d  e   d   f  r  o  m   w  w  w .  a  n  n  u  a   l  r  e  v   i  e  w  s .  o  r  g   b  y   K  o  r  e  a   U  n   i  v  e  r  s   i   t  y  o  n   0   1   /   1   2   /   1   4 .   F  o  r  p  e  r  s  o  n  a   l  u  s  e  o  n   l  y .  than the region’s trade and investment withthe rest of the world (Haggard 1993, pp. 48–49; see also Gamble & Payne 1996, Breslin &Higgott 2001, Ravenhill 2009). Pempel (2005,pp.19–20)makesadifferentbutrelateddistinc-tion; he defines regionalization as a bottom-up,societally driven process, whereas regionalism“involves primarily the process of institutioncreation” and is the intentional product of in-terstate cooperation.Katzenstein (2006, p. 1) defines regionalismas institutionalized practices and regionaliza-tionas“aprocessthatengagesactors.”ForHur-rell(1995,pp.39–40),however,regionalizationis a feature of regionalism. Regionalization is“the growth of societal integration within a re-gionand . . . theoftenundirectedprocessesofso-cial and economic interaction.” This is akin, heargues, to informal integration or “soft region-alism,” which involves increasing populationflows, multiple channels, and complex socialnetworksspreadingideasandattitudes.Fawcett (2004, p. 433) defines regionalism as a policy oraproject,whiledefiningregionalizationasbotha project and a process, preceding and flow-ing from regionalism. Alternatively, Marchandetal.(1999)emphasizetheglobalizing,restruc-turing context of regionalization. Regionaliza-tion reflects state and nonstate forces reactingin opposition to globalization, whereas region-alism concerns ideas, identities, and ideologiesrelated to a regional project. Munakata (2006)agreesthatregionalisminvolvesinstitutionses-tablished by governments to promote regionaleconomic integration but emphasizes the vary-ing degrees of commitment by members. Freetrade areas (FTAs) are considered a solid formof regionalism, whereas regional consultativebodies that lack legally binding agreements—even if they promote economic integration—are a looser form. A wide variety of researchers consider re-gionalization to be a process driven by eco-nomic or social forces and regionalism tobe a political process. Yet a multiplicity of meanings for each of these two terms re-mains. The boundaries between regionalismand regionalization remain porous. On the one FTA:  free trade area PTA:  preferentialtrading arrangement  hand,regionalizationdrivenbyprivateactors—economic and otherwise—is often reinforcedbystates.Ontheotherhand,bottom-upefforts(domestic and transnational) may lead to re-gionalism as the intended or unintended prod-uct of pressures on states. Identifying different sequencesofregionalismandregionalization—and their mutual effects—may be a more pro-ductive endeavor but it can only be advancedthrough improvements in the conceptualiza-tion and measurement of “region,” “regional-ism,” and “regionalization.” A great deal of research on regionalism hasfocused on preferential trading arrangements(PTAs),institutionsthatprovideeachmember-state with preferential access to the other par-ticipants’markets.Manysucharrangementsin- volve states in close geographic proximity (e.g.,the European Union or Mercosur), but someare not (e.g., the FTAs between the UnitedStates and Israel, Chile and South Korea, or MexicoandJapan).Inthisarticle,wepaypartic-ularattentiontoPTAs,whichinvolveeconomicpolicy coordination and cooperation amongmember-states. Among the various types of PTAs are arrangements that partially liberal-ize trade between members; FTAs, which elim-inate trade barriers among members; customsunions, which eliminate internal trade barriersand impose a common external tariff on thirdparties’ products; common markets, which al-low free movement of factors of productionand finished products across national borders;and economic unions, which are common mar-kets coupled with a currency union. Because allPTAsattempttocoordinatetradepolicyamongmembers, they are usually analyzed as a group. At the outset, it is important to recognizethat, despite contemporary observers’ partic-ular interest in PTAs formed during the past half century, regionalism is not a recent phe-nomenon. In fact, four waves of regionalismhave taken place over the past two centuries(Mansfield & Milner 1999). The first occurredduring the second half of the nineteenth cen-tury and was largely a European phenomenon(Pollard 1974, Lazer 1999, Pahre 2008). This wave was associated with the emergence of  www.annualreviews.org   ã  Regionalism 147    A  n  n  u .   R  e  v .   P  o   l   i   t .   S  c   i .   2   0   1   0 .   1   3  :   1   4   5  -   1   6   3 .   D  o  w  n   l  o  a   d  e   d   f  r  o  m   w  w  w .  a  n  n  u  a   l  r  e  v   i  e  w  s .  o  r  g   b  y   K  o  r  e  a   U  n   i  v  e  r  s   i   t  y  o  n   0   1   /   1   2   /   1   4 .   F  o  r  p  e  r  s  o  n  a   l  u  s  e  o  n   l  y .  a liberal international trading system, sincePTAs were networked via most-favored-nationclauses.Asecondwavebeganintheaftermathof  World War I. These arrangements were moreeconomicallydiscriminatorythanthoseformedduring the earlier wave. Many observers arguethat the PTAs established during the interwarera gave rise to “beggar-thy-neighbor” tradepolicies, a sharp decline in world trade, andheightenedpoliticalconflict(Irwin1993).Since World War II, two additional waves of PTAshaveoccurred.Theyhaveprovenmoredifficult tocharacterizeaseitherliberalizingordiscrim-inatorythanthefirsttwo.Onetookplaceinthe1960s and the early 1970s. The second beganduring the 1990s. Over the past two decades,PTAs have become so pervasive that more thanhalf of all international commerce has come tobe conducted within these arrangements, andalmost every country belongs to at least one. These developments have spurred substantialscholarly interest in both the causes and effectsof economic regionalism.  THE ECONOMICSOF REGIONALISM  Much of the research on regionalism has fo-cused on its welfare implications and has beenconductedbyeconomists.PTAsliberalizetradeamong members and guarantee them prefer-ential market access. At the same time, they discriminate against third parties. Economistshave devoted considerable effort to determin-ing whether the benefits from internal liberal-ization outweigh the costs of third-party dis-crimination. In a seminal study on the topic, Viner (1950) drew the distinction between“trade-creating”and“trade-diverting”customsunions.Trade-creatingunionsenhancewelfare:Liberalization among member-states shifts im-ports from less efficient producers outside thearrangementtomoreefficientproducerswithinit. Trade-diverting unions undermine welfare,asthepreferencesaffordedproducersinsidethearrangement shift imports from more efficient producers outside the arrangement to less ef-ficient producers inside it. Viner and othershave demonstrated that it is virtually impossi-ble to make any generalizations about whetherPTAs are trade creating or trade diverting. Asmentioned, there is widespread agreement that those formed during the nineteenth century tended to be trade creating, whereas those es-tablished between World Wars I and II weretradediverting.However,thereislittleconsen-sus about the PTAs formed since World War II(e.g., Krueger 1999, Bhagwati 2008).In addition to the trade-creating and trade-diverting effects of PTAs, economists have ad-dressed PTAs’ effects on the terms of trade andtheir capacity to promote economies of scale. The formation of a PTA typically improvesmembers’termsoftradevis-´ a-vistherestofthe world, thereby enhancing their welfare. But it can also lead to “beggaring thy neighbor” andtrade wars between blocs or between a bloc andaneconomicallylargecountry(Krugman1993,p. 61). Therefore, it is hard to draw any gen-eralizations about the terms-of-trade effects of PTAs. Similarly, by expanding the size of themarket to which they have unfettered access,PTAs can help member-state firms to realizeeconomies of scale and thereby promote mem-bers’ welfare; however, there is only scatteredevidence that most PTAs have actually had thiseffect (Johnson 1965, Bhagwati 1968). The issues addressed thus far concern thestatic welfare effects of PTAs. Economists havealso explored their dynamic effects, most no-tably whether PTAs promote or underminemultilateral openness (Baldwin 2008, Bhagwati2008). One school of thought holds that PTAsare stepping stones to multilateral liberaliza-tion. Various economists have argued that it is possible for countries to form a PTA that harms neither its members nor third parties,and that there are incentives for this arrange-ment to expand until it culminates in a globalfree trade system (Kemp & Wan 1976). Oth-ers have argued that if members of a PTA par-ticipate in multinational negotiations as a blocrather than as individual countries, the reduc-tion in the number of actors engaged in thenegotiations should make it easier to arrive at an acceptable bargain (Krugman 1993). These 148 Mansfield  · Solingen    A  n  n  u .   R  e  v .   P  o   l   i   t .   S  c   i .   2   0   1   0 .   1   3  :   1   4   5  -   1   6   3 .   D  o  w  n   l  o  a   d  e   d   f  r  o  m   w  w  w .  a  n  n  u  a   l  r  e  v   i  e  w  s .  o  r  g   b  y   K  o  r  e  a   U  n   i  v  e  r  s   i   t  y  o  n   0   1   /   1   2   /   1   4 .   F  o  r  p  e  r  s  o  n  a   l  u  s  e  o  n   l  y .
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