The Andean Group: Institutional Evolution, Intraregional Trade, and Economic Development

By Adkisson, Richard V. | Journal of Economic Issues, June 2003 | Go to article overview

The Andean Group: Institutional Evolution, Intraregional Trade, and Economic Development


Adkisson, Richard V., Journal of Economic Issues


A simple statement motivates this paper: "1996 stands as the year of institutional reform." The statement comes from Monica Rosell (2002) of the General Secretariat of the Andean Community. She referred to recent reforms of the Cartagena Agreement and the economic integration group it instituted in 1969, the Andean Group. (1) The Trujillo Protocol, signed in 1996 and implemented in 1997, is the source of the reform. To discuss this reform and see whether the Andean countries have moved toward meeting their joint goals during the early years of reform is the goal of this paper.

The Andean Group

The Andean Group was created in an atmosphere of distrust and disappointment. In the post-World War II era, Latin American economic thought and policy turned away from standard economic models and instead adopted the view that the existing international trading system had worked to retard industrial development in the region. One response to this distrust was regional economic integration aimed at expanding the size of and access to regional markets and industrialization through import substitution. The Latin American Free Trade Area (LAFFA), formed in 1960, was the most ambitious attempt at integration, eventually involving Mexico and virtually all the South American nations (Garman et al. 1998). The disappointment came when the Andean nations realized that most of the benefits of LAFTA were accruing to its largest members, Mexico, Brazil, and Argentina. One result of the disappointment was the signing of the Cartagena Agreement and the formation of the Andean Group (2) in 1969 (Middlebrook 1978; Hojman 1981 ).

Many of the goals set out in the Cartagena Agreement were consistent with LAFTA goals--to accelerate growth, to create employment, to reduce external vulnerability, and to promote capital formation by changing the existing pattern of trade flows. The agreement also set the goal of "balanced and harmonious development." Because of the LAFTA experience, the Andean Group sought to assure a distribution of benefits that would close the economic gap between the smaller and larger member nations in the group (Cartagena Agreement, chap. 1, art. 1). That the group was serious in its intentions is evident in the special consideration given Bolivia and Ecuador as group policies evolved over the years. In addition to policies specifically aimed at changing and controlling trade flows, industrial policies were adopted to promote industrialization at the regional level. The most ambitious was the policy of sectorial development, wherein the group was to assign member nations the exclusive rights to develop selected indust ries that, owing to economies of scale, were potentially economically viable at the group level but not economically viable for any individual nation (Middlebrook 1978). In the early years of the group, member nations were firm and consistent in their support of the general integration effort, although their support of specific aspects varied according to their national interests (Avery 1983).

The failures of the group were many. David Hojman (1981) argued that, given the mechanisms in place in the Andean Group and the different starting points of member nations, the group would be unable to meet its goal of balanced development. Khashayer Khazeh and Don Clark (1990) concluded that more Andean trade was created than was diverted during the 1968-1997 period, but George Garman etal. (1998) found no evidence that the Andean Group had been effective at promoting intra group trade in the 1975-1992 period. Similarly, Juan Echavarria (1998) claimed that the sectonal development program mentioned above had still not been effectively implemented and that other group policy goals--regional liberalization and a common external tariff--were not implemented until the 1990s. Whatever the specific reasons, by many measures the Andean nations were worse off during the two decades from the early 1970s to the early 1990s than they were in early years of the group's formation (Adkisson 1998). …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Andean Group: Institutional Evolution, Intraregional Trade, and Economic Development
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.