Regional Integration as Diplomacy
Regional integration agreements are examples of second-best policies and have an ambiguous impact on welfare. This article builds a model in which regional integration agreements unambiguously raise welfare by correcting for externalities. It assum...
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| Format: | Journal Article |
| Language: | English en_US |
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World Bank
2013
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| Online Access: | http://documents.worldbank.org/curated/en/1998/05/17718660/regional-integration-diplomacy http://hdl.handle.net/10986/16435 |
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okr-10986-16435 |
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oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ABSOLUTE VALUE AGRICULTURAL TRADE ANDEAN PACT AVERAGE TARIFFS BENEFITS OF TRADE BORDER MEASURES CAPITAL GOODS CIVIL WAR COMMON MARKET COMPARATIVE ADVANTAGE CONCESSIONS CONSUMER PRICES CONSUMERS CURRENCY CUSTOMS CUSTOMS UNION CUSTOMS UNIONS DEMAND CURVE DEMAND CURVES DEMOCRACIES DEMOCRACY DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT ECONOMICS DIVIDEND DOMESTIC TAXES ECONOMIC AGREEMENTS ECONOMIC COOPERATION ECONOMIC INTEGRATION ECONOMIC OBJECTIVES ECONOMIC POLICIES ECONOMIC POLICY ECONOMIC POWER ECONOMIC REFORM ECONOMIC RELATIONS ECONOMIC RESEARCH ECONOMIC THEORY ECONOMIC WELFARE ECONOMICS RESEARCH ECONOMIES OF SCALE ELASTICITY ELASTICITY OF DEMAND EMBARGO EQUATIONS EQUILIBRIUM EUROPEAN UNION EXPORT SUBSIDIES EXPORTS EXTERNAL BARRIERS EXTERNAL TARIFF EXTERNAL TARIFFS EXTERNAL TRADE EXTERNAL TRADE BARRIERS EXTERNAL TRADE POLICY EXTERNALITIES EXTERNALITY FACE VALUE FOREIGN DIRECT INVESTMENT FOREIGN SOURCES FORMAL ANALYSIS FREE TRADE FREE TRADE AGREEMENT FREE TRADE AGREEMENTS FUNCTIONAL FORMS GENERAL AGREEMENT ON TARIFFS GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM MODEL GLOBAL TRADING GRANGER CAUSALITY HARMONIZATION HOME COUNTRY IMPACT OF TRADE INCOME INCOMES INSURANCE INTERNAL MARKET INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL POLITICS INTERNATIONAL TRADE INTERNATIONAL TRADING MARGINAL PRODUCTS MARGINAL UTILITY MARGINAL VALUE MARKET ACCESS MARKET SEGMENTATION MARKET SHARE MUTUAL INVESTMENT MUTUAL RECOGNITION MUTUAL RECOGNITION OF STANDARDS NASH EQUILIBRIUM NATIONAL INCOME OPEN MARKETS OPTIMIZATION OUTPUT PER CAPITA INCOME POLICY RESEARCH POSITIVE EXTERNALITIES POSITIVE EXTERNALITY POTENTIAL CONFLICTS PREFERENTIAL TRADE PREFERENTIAL TRADE AGREEMENTS PREFERENTIAL TRADING ARRANGEMENTS PRESENT VALUE PRICE OF IMPORTS PRODUCTION FUNCTION PRODUCTION FUNCTIONS PUBLIC GOOD REGIONAL GROUPS REGIONAL INTEGRATION REGIONAL INTEGRATION AGREEMENT REGIONAL INTEGRATION AGREEMENTS REGIONAL POWERS REGIONAL TRADE REGIONAL TRADE AGREEMENTS REGIONALISM RULES OF ORIGIN SECURITY CONCERN SECURITY CONCERNS SINGLE MARKET SMALL COUNTRIES SOCIAL CAPITAL SOCIAL COST SOCIAL DEMAND SOCIAL VALUE SOCIAL VALUES SOCIAL WELFARE TARIFF RATE TAX TAX RATE TAXATION TERMS OF TRADE TRADE BARRIERS TRADE BLOCKS TRADE CREATION TRADE DIVERSION TRADE FLOWS TRADE FRICTIONS TRADE LIBERALIZATION TRADE MODEL TRADE MORE TRADE NEGOTIATIONS TRADE POLICIES TRADE POLICY TRADE PREFERENCES TRADE RELATIONS TRADE SURPLUS TRADE TAXES TRADING BLOCS TRADING SYSTEM UNILATERAL LIBERALIZATION URUGUAY ROUND UTILITY FUNCTION UTILITY MAXIMIZATION VALUE OF IMPORTS WEALTH WELFARE FUNCTION WELFARE GAINS WELFARE LOSS WORLD ECONOMY WORLD MARKET WORLD PRICES |
| spellingShingle |
ABSOLUTE VALUE AGRICULTURAL TRADE ANDEAN PACT AVERAGE TARIFFS BENEFITS OF TRADE BORDER MEASURES CAPITAL GOODS CIVIL WAR COMMON MARKET COMPARATIVE ADVANTAGE CONCESSIONS CONSUMER PRICES CONSUMERS CURRENCY CUSTOMS CUSTOMS UNION CUSTOMS UNIONS DEMAND CURVE DEMAND CURVES DEMOCRACIES DEMOCRACY DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT ECONOMICS DIVIDEND DOMESTIC TAXES ECONOMIC AGREEMENTS ECONOMIC COOPERATION ECONOMIC INTEGRATION ECONOMIC OBJECTIVES ECONOMIC POLICIES ECONOMIC POLICY ECONOMIC POWER ECONOMIC REFORM ECONOMIC RELATIONS ECONOMIC RESEARCH ECONOMIC THEORY ECONOMIC WELFARE ECONOMICS RESEARCH ECONOMIES OF SCALE ELASTICITY ELASTICITY OF DEMAND EMBARGO EQUATIONS EQUILIBRIUM EUROPEAN UNION EXPORT SUBSIDIES EXPORTS EXTERNAL BARRIERS EXTERNAL TARIFF EXTERNAL TARIFFS EXTERNAL TRADE EXTERNAL TRADE BARRIERS EXTERNAL TRADE POLICY EXTERNALITIES EXTERNALITY FACE VALUE FOREIGN DIRECT INVESTMENT FOREIGN SOURCES FORMAL ANALYSIS FREE TRADE FREE TRADE AGREEMENT FREE TRADE AGREEMENTS FUNCTIONAL FORMS GENERAL AGREEMENT ON TARIFFS GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM MODEL GLOBAL TRADING GRANGER CAUSALITY HARMONIZATION HOME COUNTRY IMPACT OF TRADE INCOME INCOMES INSURANCE INTERNAL MARKET INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL POLITICS INTERNATIONAL TRADE INTERNATIONAL TRADING MARGINAL PRODUCTS MARGINAL UTILITY MARGINAL VALUE MARKET ACCESS MARKET SEGMENTATION MARKET SHARE MUTUAL INVESTMENT MUTUAL RECOGNITION MUTUAL RECOGNITION OF STANDARDS NASH EQUILIBRIUM NATIONAL INCOME OPEN MARKETS OPTIMIZATION OUTPUT PER CAPITA INCOME POLICY RESEARCH POSITIVE EXTERNALITIES POSITIVE EXTERNALITY POTENTIAL CONFLICTS PREFERENTIAL TRADE PREFERENTIAL TRADE AGREEMENTS PREFERENTIAL TRADING ARRANGEMENTS PRESENT VALUE PRICE OF IMPORTS PRODUCTION FUNCTION PRODUCTION FUNCTIONS PUBLIC GOOD REGIONAL GROUPS REGIONAL INTEGRATION REGIONAL INTEGRATION AGREEMENT REGIONAL INTEGRATION AGREEMENTS REGIONAL POWERS REGIONAL TRADE REGIONAL TRADE AGREEMENTS REGIONALISM RULES OF ORIGIN SECURITY CONCERN SECURITY CONCERNS SINGLE MARKET SMALL COUNTRIES SOCIAL CAPITAL SOCIAL COST SOCIAL DEMAND SOCIAL VALUE SOCIAL VALUES SOCIAL WELFARE TARIFF RATE TAX TAX RATE TAXATION TERMS OF TRADE TRADE BARRIERS TRADE BLOCKS TRADE CREATION TRADE DIVERSION TRADE FLOWS TRADE FRICTIONS TRADE LIBERALIZATION TRADE MODEL TRADE MORE TRADE NEGOTIATIONS TRADE POLICIES TRADE POLICY TRADE PREFERENCES TRADE RELATIONS TRADE SURPLUS TRADE TAXES TRADING BLOCS TRADING SYSTEM UNILATERAL LIBERALIZATION URUGUAY ROUND UTILITY FUNCTION UTILITY MAXIMIZATION VALUE OF IMPORTS WEALTH WELFARE FUNCTION WELFARE GAINS WELFARE LOSS WORLD ECONOMY WORLD MARKET WORLD PRICES Schiff, Maurice Winters, L. Alan Regional Integration as Diplomacy |
| description |
Regional integration agreements are
examples of second-best policies and have an ambiguous
impact on welfare. This article builds a model in which
regional integration agreements unambiguously raise welfare
by correcting for externalities. It assumes that trade
between neighboring countries raises trust between them and
reduces the likelihood of conflict. The optimum intervention
in that case is a subsidy on imports from the neighbor. The
article shows that an equivalent solution is for the
neighboring countries to tax imports from the rest of the
world that is, to form a regional integration agreement
together with some domestic taxes. The article shows that
(1) the optimum tariffs on imports from the rest of the
world are likely to decline over time; (2) deep integration
implies lower optimum external tariffs if it is exogenous;
(3) optimum external tariffs are higher before deep
integration and lower thereafter if deep integration is
endogenous; and (4) enlargement of bloc size (in terms of
symmetric countries) has an ambiguous impact on external
tariffs but raises welfare, and some form of domino effect exists. |
| format |
Publications & Research :: Journal Article |
| author |
Schiff, Maurice Winters, L. Alan |
| author_facet |
Schiff, Maurice Winters, L. Alan |
| author_sort |
Schiff, Maurice |
| title |
Regional Integration as Diplomacy |
| title_short |
Regional Integration as Diplomacy |
| title_full |
Regional Integration as Diplomacy |
| title_fullStr |
Regional Integration as Diplomacy |
| title_full_unstemmed |
Regional Integration as Diplomacy |
| title_sort |
regional integration as diplomacy |
| publisher |
World Bank |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/1998/05/17718660/regional-integration-diplomacy http://hdl.handle.net/10986/16435 |
| _version_ |
1764433068033048576 |
| spelling |
okr-10986-164352021-04-23T14:03:29Z Regional Integration as Diplomacy Schiff, Maurice Winters, L. Alan ABSOLUTE VALUE AGRICULTURAL TRADE ANDEAN PACT AVERAGE TARIFFS BENEFITS OF TRADE BORDER MEASURES CAPITAL GOODS CIVIL WAR COMMON MARKET COMPARATIVE ADVANTAGE CONCESSIONS CONSUMER PRICES CONSUMERS CURRENCY CUSTOMS CUSTOMS UNION CUSTOMS UNIONS DEMAND CURVE DEMAND CURVES DEMOCRACIES DEMOCRACY DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT ECONOMICS DIVIDEND DOMESTIC TAXES ECONOMIC AGREEMENTS ECONOMIC COOPERATION ECONOMIC INTEGRATION ECONOMIC OBJECTIVES ECONOMIC POLICIES ECONOMIC POLICY ECONOMIC POWER ECONOMIC REFORM ECONOMIC RELATIONS ECONOMIC RESEARCH ECONOMIC THEORY ECONOMIC WELFARE ECONOMICS RESEARCH ECONOMIES OF SCALE ELASTICITY ELASTICITY OF DEMAND EMBARGO EQUATIONS EQUILIBRIUM EUROPEAN UNION EXPORT SUBSIDIES EXPORTS EXTERNAL BARRIERS EXTERNAL TARIFF EXTERNAL TARIFFS EXTERNAL TRADE EXTERNAL TRADE BARRIERS EXTERNAL TRADE POLICY EXTERNALITIES EXTERNALITY FACE VALUE FOREIGN DIRECT INVESTMENT FOREIGN SOURCES FORMAL ANALYSIS FREE TRADE FREE TRADE AGREEMENT FREE TRADE AGREEMENTS FUNCTIONAL FORMS GENERAL AGREEMENT ON TARIFFS GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM MODEL GLOBAL TRADING GRANGER CAUSALITY HARMONIZATION HOME COUNTRY IMPACT OF TRADE INCOME INCOMES INSURANCE INTERNAL MARKET INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL POLITICS INTERNATIONAL TRADE INTERNATIONAL TRADING MARGINAL PRODUCTS MARGINAL UTILITY MARGINAL VALUE MARKET ACCESS MARKET SEGMENTATION MARKET SHARE MUTUAL INVESTMENT MUTUAL RECOGNITION MUTUAL RECOGNITION OF STANDARDS NASH EQUILIBRIUM NATIONAL INCOME OPEN MARKETS OPTIMIZATION OUTPUT PER CAPITA INCOME POLICY RESEARCH POSITIVE EXTERNALITIES POSITIVE EXTERNALITY POTENTIAL CONFLICTS PREFERENTIAL TRADE PREFERENTIAL TRADE AGREEMENTS PREFERENTIAL TRADING ARRANGEMENTS PRESENT VALUE PRICE OF IMPORTS PRODUCTION FUNCTION PRODUCTION FUNCTIONS PUBLIC GOOD REGIONAL GROUPS REGIONAL INTEGRATION REGIONAL INTEGRATION AGREEMENT REGIONAL INTEGRATION AGREEMENTS REGIONAL POWERS REGIONAL TRADE REGIONAL TRADE AGREEMENTS REGIONALISM RULES OF ORIGIN SECURITY CONCERN SECURITY CONCERNS SINGLE MARKET SMALL COUNTRIES SOCIAL CAPITAL SOCIAL COST SOCIAL DEMAND SOCIAL VALUE SOCIAL VALUES SOCIAL WELFARE TARIFF RATE TAX TAX RATE TAXATION TERMS OF TRADE TRADE BARRIERS TRADE BLOCKS TRADE CREATION TRADE DIVERSION TRADE FLOWS TRADE FRICTIONS TRADE LIBERALIZATION TRADE MODEL TRADE MORE TRADE NEGOTIATIONS TRADE POLICIES TRADE POLICY TRADE PREFERENCES TRADE RELATIONS TRADE SURPLUS TRADE TAXES TRADING BLOCS TRADING SYSTEM UNILATERAL LIBERALIZATION URUGUAY ROUND UTILITY FUNCTION UTILITY MAXIMIZATION VALUE OF IMPORTS WEALTH WELFARE FUNCTION WELFARE GAINS WELFARE LOSS WORLD ECONOMY WORLD MARKET WORLD PRICES Regional integration agreements are examples of second-best policies and have an ambiguous impact on welfare. This article builds a model in which regional integration agreements unambiguously raise welfare by correcting for externalities. It assumes that trade between neighboring countries raises trust between them and reduces the likelihood of conflict. The optimum intervention in that case is a subsidy on imports from the neighbor. The article shows that an equivalent solution is for the neighboring countries to tax imports from the rest of the world that is, to form a regional integration agreement together with some domestic taxes. The article shows that (1) the optimum tariffs on imports from the rest of the world are likely to decline over time; (2) deep integration implies lower optimum external tariffs if it is exogenous; (3) optimum external tariffs are higher before deep integration and lower thereafter if deep integration is endogenous; and (4) enlargement of bloc size (in terms of symmetric countries) has an ambiguous impact on external tariffs but raises welfare, and some form of domino effect exists. 2013-12-20T20:29:13Z 2013-12-20T20:29:13Z 1998-05-01 http://documents.worldbank.org/curated/en/1998/05/17718660/regional-integration-diplomacy World Bank Economic Review http://hdl.handle.net/10986/16435 English en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank World Bank Publications & Research :: Journal Article Publications & Research :: Journal Article |