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International integration. Past and present. Учебное пособие

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the elimination of customs within its internal borders, transferring their functions to the customs at the external frontiers of the common customs territory. The examples are the EU and the Customs Union of Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan. This integration model changes flows of goods, stimulates imports from other member countries, as well as changes in manufacturing and consumption.
Common market implies the elimination of all barriers to free movement of production factors between member states, changes in the institutional framework of integration, convergence of national laws, and the establishment of common governing bodies for the unification process.
Free movement of production factors within common market may be affected by the differences in economic policies of its members, as the latter admits the complete lack of coordination in economic policy with all its consequences. The solution to this problem is possible through the transition to deeper integration.
The above-mentioned contradiction can be resolved through the establishment of economic union which involves harmonization of economic policies of its members. Thus, the European Union pursues a common policy in the industrial, energy, transport, social, scientific, agricultural, and other areas.
If the level of economic policy coordination is high enough, it begins to follow its own logic linking a wide range of issues more and more closely, finally obtaining its logical conclusion in a more complex form of integration – economic and monetary union.
Table 1
Main Forms of International Integration
Free Trade Area Removing trade barriers in mutual trade +
Customs Union
Common Market
Economic Union
Full Economic and Political Integration
Establishing a uniform system of trade barriers + Freedom of capital and labor transfer, coordination of economic policies + Coordination of economic policies of member states + Implementation of a unified economic and monetary policy
Monetary union involves creation of a single currency system including common currency and common emission center. This ensures more close coordination of monetary and macroeconomic policy.
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Full economic and political integration involves merging of a common market into a single economic and political entity, as well as full harmonization of economic policy and its legislative framework. At this stage a new subject of international economic and political relations emerges and a single confederative or federal state is established.
Nowadays, the more flexible and non-traditional models of integration emerge, for example, the intensive growth triangles tested in the Asia-Pacific and involving the integration of border areas in several countries. This model is used in Europe too. Thus, there is a project of the triangle including Kaliningrad, Finland, and St. Petersburg.
The transition from lower levels of integration to higher ones is a stage of integration. The duration of a stage depends on many conditions. Practice shows that international integration is a self­contradictory phenomenon and seldom develops smoothly. The complexity of creating a common integration area may be illustrated by the experience of the European integration, which occurs due to the divergence of interests between different member nations.
As a result, the diversified integration becomes possible which involves the use of different forms of integration by members of an association. Such concept is implemented within the European Union in the form of “concentric circles integration” which is established, for example, around the nucleus consisting of the Eurozone countries. Within the Community of Independent States (CIS) the model of multi­level integration is applied which encompasses the Union State of Russia and Belarus, the Eurasian Economic Community, Central Asian Economic Community, etc.
Test Your Knowledge
1. Characterize Western and Asian (“soft”) integration models.
2. What are positive and negative models of integration?
3. Describe the main types of international organizations: A) FTA; B) Customs union; C) Common market; D) Economic and monetary union; E) Full economic and political integration;
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F) Non-traditional forms of international integration (intensive
growth triangles, etc.)
4. Explain the concept of the stages of international integration.
Characterize the following:
A) Diversified integration; B) Concept of concentric circles integration; C) Model of multi-level integration.
Topics for Discussion
1. Role of TNCs in international integration.
2. Social aspects of international integration.
3. Information technology revolution and international integration.
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Chapter II
Theorizing International Integration
Unit 2.1. Theories of International Integration: Classification Attempts. An idea of international integration emerged in the 1930s
and was based on the views of the European politicians and intellectuals who survived the horrors of two world wars. The first theorists of integration who tried to identify and explain the general principles of functioning of the IOs known at that time – the League of Nations, the UN, etc., shared the idea of preserving peace through voluntary association of countries and peoples.
Perhaps for this reason most of the integration theories are closely related to the European integration. Their major groups are following:
1) Classic (“high”) theories: federalism, functionalism,
intergovernmentalism;
2) Neo-institutional (“middle”) theories: historical neo-
institutionalism of rational choice, sociological neo-institutionalism;
3) New (“low”) theories: theory of political networks, multi-level
governance theory, etc.
Classical (“high”) theories:
1) Focus on the key aspects of international integration – the most important international agreements in this area, political decision making, as well as on those who make decisions and sign the relevant agreements;
2) Virtually ignore the current issues of IOs functioning, the effect of non-traditional actors, etc.
Neo-institutional (“middle”) theories may be characterized by their focus on the current, everyday aspects of international integration. Most of all, they consider the following:
1) Impact of different institutions, procedures, and powers
delegated to supranational level;
2) Study of the evolution of institutions which have arisen in the
course of integration;
3) Significance of values and norms generated by various
institutions.
New (“low”) theories cover a wide range of concepts resulting from significant acceleration of international integration in the 1980­90s, which are actively developing nowadays.
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Test Your Knowledge
1. When and why did an idea of international integration emerge?
2. Why are most of the integration theories closely related to the
European integration?
3. What major groups of the integration theories exist?
4. What are the features of classical (“high”) theories?
5. How the neo-institutional (“middle”) theories may be
characterized?
Unit 2.2. The Economic Approach to Theorizing International Integration. Traditional theoretical approaches to international
integration deal with it primarily from the economic viewpoint. According to them, the effect of integration implies:
1) Deepening IDL;
2) Consolidation of markets;
3) Increase in production volumes;
4) Redistribution of trade flows;
5) Increasing welfare in the countries participating in integration.
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Thus, the neoliberal economists of the first half of the 20 century, such as Maurice Allais or Wilhelm Röpke, understood international integration as the establishment of a common economic area of two or more countries which would imply liberating foreign trade and finance from state control. The way to integration neoliberals saw through the following:
1) Liberalization of foreign trade;
2) Merger of the markets.
This, in turn, would allow to:
1) Raise the efficiency of production;
2) Raise the competitiveness of the integrated economies;
3) Improve the living standards of the population. It was anticipated to achieve these goals through the growing
specialization of production as well as the growth of IDL.
The proponents of structuralism (Gunnar Myrdal and others)
actively criticized the neoliberal idea of the full liberalization of foreign trade in an integrated area, because, as they used to think, the lack of control of the market would cause:
1) Disparities in the distribution and development of production;
2) Deepening of social inequality.
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Structuralism economists understood international integration as a part of restructuring of the integrated nations’ economies. They considered large companies and entire industries as the driving forces of integration. According to them, international integration should lead to the creation of new economic space with an improved model of management.
Corporationalists (Sydney Rolf, Eugene Rostow, and others) considered international corporations as the locomotive of integration because they stimulate rationalization and balanced development of the world economy.
Neo-Keynesians (Richard Cooper and others) considered close coordination in domestic and foreign affairs of the IOs participants as a key to successful integration alongside with maintaining the widest possible freedom, which involves seeking an optimum combination of the two possible ways of international integration:
1) Close connection with abandoning national sovereignty and
coordination of economic policies;
2) Integration with the maximum preservation of independence of
its participants.
A kind of Keynesianism is dirigisme (Jan Tinbergen and others) which denies the crucial role of market in international integration. The proponents of dirigisme believe that the formation and functioning of IOs are possible through common economic and monetary policy and the harmonization of social legislation.
Test Your Knowledge
1. Analyze the economic approaches to international integration
such as:
A) Neoliberalism;
B) Structuralism;
C) Corporatism;
D) Neo-Keynesianism;
E) Dirigisme.
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2. The neoliberal economists of the first half of the 20
century
understood international integration as:
A) A part of restructuring of the integrated nations’ economies;
B) The establishment of a common economic area of two or more countries which implies liberating foreign trade and finance from state control;
C) Close coordination in domestic and foreign affairs of the IOs participants.
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Unit 2.3. A Federalist View. One of the early ideological trends in studying the nature of international integration is federalism which emerged in the 1930s. A characteristic feature of federalism is its critical attitude to a nation state as an institution blamed by many Europeans for two world wars which brought so much trouble to the peoples of Europe and ultimately caused the crisis of European civilization.
The proponents of federalism such as Amitai Etzioni, Altiero Spinelli, Carl Friedrich, Daniel Eleyzer, and others considered federative relations as the most preferable. They understood federalism as repudiation of centralization based on general agreement and vesting multiple centers of power with governmental authority, as well as insuring it by the adoption of a constitutional act.
A priority given to the political rather than economic side of integration is another feature of federalism. The possibility of an optimum combination of the elements of unity and specific features of IOs participants is considered as its main advantage. Proponents of federalism pointed out that under new conditions a nation state was unable to do the following:
1) Remove violence from political life;
2) Suppress radical nationalist and religious movements;
3) Prevent the emergence of authoritarian and totalitarian
political regimes;
4) Renounce war as a way to solve international disputes with
the result that it (a nation state) loses its credibility.
Therefore, a nation state must be replaced with a supranational union of federal nature. However, a nation state as a principle of social organization is not abandoned completely, as according to federalists the natural result of international integration would be a supranational mega-state.
Federalism focuses on vertical and horizontal distribution of political and economic power. The horizontal dimension should be a guarantee of democratic organization of political life, while the vertical one is also intended to promote the concentration of power in the hands of people, which implies a rigid adherence to the principle of the separation of powers. In general, proponents of federalism considered a fairly high degree of power centralization as a condition for success of integration projects. However, the active participation of civil society in the implementation of integration projects had been regarded by them as another condition for success and sustainability of IOs.
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Alongside with this, federalism assigns an important role to the establishment and functioning of institutions. The establishment of supranational institutions vested with extensive powers and authority as well as their priority over national institutions are seen as a guarantee of successful integration.
Federalists have never disputed the sovereignty of the IOs member states. The main benefits from the creation of IOs they saw in the following:
1) Economies of scale – cost reductions in the implementation of
joint projects in various fields;
2) Legislative support mechanisms for transfer of power in a federation in the presence of effective institutions eliminating the possibility of usurpation of power by any political force;
3) Synergistic effect meaning that the overall power of an IO is substantially bigger than just the sum of the capacities of its member states;
4) Preservation of their extensive rights by the IOs member­states contributes to a more profound implementation of democratic principles than the excessive concentration of power in the hands of supranational bodies.
Critics of federalism pay attention to the following vulnerable
points of this concept:
1) It focuses on the political aspects of international integration without due consideration of its economic side;
2) It implies that the means of control over state power is essentially the state itself;
3) Supranational federation means the formation of a new bureaucracy and the possibility of a conflict between it and civil society;
4) The system of checks and balances within a nation state is more effective in terms of respect for democracy, as compared to a supranational federation;
5) Supranational federation may exclude military conflicts between its members but it is not insured from engaging in wars with other supranational organizations.
Test Your Knowledge
1. Federalism is:
A) A system under which areas connected into one state retain a
greater or lesser degree of political autonomy;
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B) A school of political economy according to which the
economic life and the economic categories are institutionalized;
C) A harmonized system of exchange rates between the states; D) Convergence of different economic systems, removal of the
differences between them due to common socio-economic problems.
2. What are major characteristic features of federalism?
3. Federalism gives priority to:
A) Political side of integration; B) Economic integration.
4. What are the main benefits from the creation of IOs according to federalists?
5. What are the most vulnerable points of federalism?
Unit 2.4. Functionalists and Neo-Functionalists. The 1930s also saw the emergence of functionalism, an approach to the study of international integration in the framework of international relations, which is based on the critique of a nation state as an institution. Functionalism involves replacing the existing system of supranational institutions whose form should be determined by the functions they perform.
Functionalist theory had first been formulated by David Mitrany and was aimed at eliminating war as a method of solving international disputes. According to D. Mitrany, international integration makes sense only if there are common problems whose solution is beyond the capacity of individual states, provided that the interest in cooperation to resolve them really exists (a natural selection of interests).
Functionalism identifies two levels of integration: political and technocratic. The first refers to political cooperation between states, while the second – to social and economic problems.
Mitrany considered the aspiration to power expansion at the expense of other states as generating conflicts and making cooperation between them impossible as implicit to a state and as a part of the political level. That is why the firmest foundation of integration is technocracy for which such acute contradictions and conflicts are not so typical, as for politics. It also implies the need for removal of technocratic perspective from the jurisdiction of a nation state.
Mitrany believed that cooperation in the technocratic area will bolster cooperation between specialized groups and individuals involved in it, which will result in the new relationships within these groups. He designated this phenomenon by the term “loyalty”.
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According to Mitrany, it should surpass the loyalty to a nation state. Finally, the expansion of technical cooperation will lead to the emergence of global society and the concept of state sovereignty will lose its value.
D. Mitrany presumed that the gradual loss of sovereignty by a nation state would contribute to the strengthening of peace. He believed that in the years to come the international relations system based on the recognition of national sovereignty would be replaced by worldwide federal state or a stateless anarchic society.
However, functionalism turned out to be limited and vulnerable to criticism in many ways. Thus, there had been found no grounds for mutual opposition of the politics and technocracy; at the same time, the political motivation of technocrats and wide use of technocratic tools by politicians had been revealed. Practice has shown that, notwithstanding the views of Mitrany, the identification of the people’s needs is not a technocratic, but rather a competitive market problem, i.e. implying conflict and closely related to politics.
The 1960–70s witnessed the extension of the neo-functionalist approach to the study of international integration. It was based largely on the same ideas as functionalism, developing and modifying the provisions of the latter.
Neo-functionalism had been split into two main schools of thought. The first one known as communication theory found its expression in the works of Karl Deutsch and analyzed international integration as a part of the international relations system as a whole. The second had been developed by Ernst Haas dealing with regional and first of all, the European integration.
Proponents of the communication theory looked for the ways to improve the international relations system without its radical transformation. K. Deutsch was the first to understand the difference between a state and the so-called “sociological nation”. He gave a sociological interpretation of a nation state and the international relations system proving the importance of both the interstate and “inter-societal” relations. He regarded social communications as a sort of building blocks for local communities which in their turn would give rise to a nation state.
Deutsch understood international integration as a creation of the feeling of community within certain territorial borders and as an aspiration of the community members to the gradual evolutionary change, which may be achieved through the establishment of the really working public institutions. He considered the feeling of
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