History of European Economic Integration
The phrase economic integration has only fairly recently been used to denote the combination of separate economies into larger groupings. As such, its use in practice seems to refer either to the state of being integrated or to the process of achieving that state, and more than occasionally to both at the same time. In other words, reference to European integration may apply to the exact degree of economic integration that has been achieved (state of affairs), while also implying that this is merely one stage in a movement toward greater integration (process).
The word degree, in fact, may be useful in denoting both the present state of affairs and a stage in progress toward greater economic unification. There seems to be some agreement that full economic integration would imply the greatest possible division of labor, the fullest possible mobility of factors, and the least possible discrimination within the grouping. Movement toward this state may take place by various forms, or degrees, of unification, including international trade integration, factor integration, and policy integration, probably in that order. Greater freedom of trade between states, for example, may be both a form of integration and a prerequisite for even greater integration (e.g., through a freer movement of labor and capital).
Although the measurement of the exact degree of integration is, at least conceptually, best achieved by examination of the effects of integration (e.g., through the equalization of product or factor prices), it is possible to apply this concept of degrees of integration to the establishment of the conditions under which greater unification may occur. This is what is typically done, in any case, as shown by the various terms that apply to greater degrees, or forms, of economic integration.