Domestic politics, regional economic co-operation, and global economic integration
William D. ColemanandGeoffrey R.D. Underhill
Global economic integration is one of the most pronounced developments of the late twentieth century. The liberalization of domestic economies, the strengthening of (basically liberal) co-operative regimes in international trade and finance, and the transnationalization of corporate structures have all contributed to this dramatically accelerated growth of globally integrated market structures.
The ‘globalization’ thesis can be taken too far, however. It is undoubtedly premature to announce the disintegration or even emasculation of domestic state institutions as a significant focus for economic management and change. The policies of nation-states continue to structure the market domain, liberalizing some aspects, yet retaining tight control of others. Likewise, global market integration has been accompanied by different patterns of institutionalized regional economic co-operation.
That various regions of the global economy should manifest distinct patterns of integration within the larger global context is hardly surprising. Geographical proximity is the likely starting point of this phenomenon. Unless there is a forbidding enmity between peoples (and sometimes despite it), one trades with one’s neighbours first before moving further afield. Shared historical experiences among states of a particular region develop over time (not always pleasant ones), and the cultural affinities which facilitate commerce are more likely with neighbouring peoples than with those from afar. What is more remarkable, and more difficult to explain in the late twentieth century is not, then, the mere fact of different regional patterns, but the trend towards formalization of these regional patterns into a series of co-operative arrangements to facilitate regional economic integration of various kinds.
Most pronounced in this regard is undoubtedly the European Union as it moves, with some trepidation, towards a single currency. The implementation of the Single European Act and the conclusion of the Maastricht Treaty have greatly accelerated the process of European integration. A significant number of public policy issues in the EU member-states are now managed to a greater or lesser extent through co-operative processes at the regional level. The movement towards a single market for goods, services and capital