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Games regional actors play: dependency, regionalism, and integration theory for the Global South

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Abstract

Prevailing integration theories suffer from Eurocentrism and cannot be applied to developing regions, because they implicitly rely on intraregional economic interdependence as a driving force for regional integration. This article starts from the observation that intraregional economic interdependence is low and dependence on extra-regional economic relations is high in the Global South. The aim of regional integration in developing regions is not the liberalisation and regulation of intraregional trade, rather an effort to improve the regions’ competitiveness on the global market. Well-integrated developing regions may attract more extra-regional investment inflows and negotiate better access to extra-regional export markets, but the regional member states also compete with each other for their respective shares in extra-regional investment and trade. Dominant regional powers may do better in this competition if they act unilaterally and strive for privileged economic relations with extra-regional partners. As a result, the respective member states defect and regional integration is stalled. Case studies of MERCOSUR and SADC confirm that Brazil and South Africa protected their privileged positions during the last 15 years. In contrast, ASEAN is not dominated by a regional power and economic integration has proceeded due to the gains from extra-regional cooperation within the ASEAN + 3 framework.

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Notes

  1. In the following, I use the term regional cooperation whenever I refer to single decisions of regional organisations and their member states. In contrast, regional integration is a process, which unfolds over time and encompasses several cases of regional cooperation.

  2. Own calculation based on UN Comtrade data (comtrade.un.org).

  3. The structure of the game is independent of the fact whether it is played by two or more players. Regional trade liberalisation is a club good, which implies that defecting member states can be selectively excluded from the consumption of that good by other players. Thus, free riding of single players can be punished by other players. In fact, regional trade liberalisation can be understood as a web of bilateral prisoner’s dilemmas between all regional member states.

  4. If the two players played contrite tit-for-tat instead of simple tit-for-tat, the payoff for defection in the first round would be higher, because it would not necessarily lead to an endless sequence of mutual retaliations (Kydd 2015). However, this would not change the fundamental structure of the game because mutual cooperation would still be a Nash equilibrium in the long run.

  5. The Commission and the ECJ may impose financial penalties on member states, which do not implement EU legislation. However, in the end, the Commission and the ECJ cannot rely on any kind of force, if the respective member states refuse to pay these fees. Only member states’ general interest in regional cooperation forces them to accept the rules of the game.

  6. For example, Collier (2007) has argued that Africa did not have the same chances of economic development as East Asia at the turn of the millennium, because labour-intensive industries have already invested in production networks in East Asia and were not investing to the same degree in Africa. In other words, East Asia had already ‘consumed’ the investments, which were needed for economic development in Africa. Nowadays, the prospects for African development improve, because wages in East Asia are increasing and East Asian countries like China are beginning to invest in Africa.

  7. The somewhat unfortunate term ‘Rambo’ does not refer to the Hollywood movie, but to a game theoretical situation first described by Zürn (1993). See also Holzinger (2003), Scharpf (1997), Stein (1982).

  8. MERCOSUR has only four member states (Venezuela joined as the fifth member state in 2012, but its membership was suspended in 2016), whereas SADC has 15; ASEAN is very heterogeneous in cultural terms, whereas MERCOSUR is dominated exclusively by Catholicism; and SADC includes authoritarian and failed states, whereas MERCOSUR consists only of presidential democracies.

  9. Competing organisations like the South Asian Association for Regional Cooperation (SAARC), the Andean Community (Spanish: Comunidad Andina, CAN), or the Economic Community of West African States (ECOWAS) are characterised by lower incomes per capita and lower shares of intraregional trade.

  10. The other two pillars are the ASEAN Political-Security Community and the ASEAN Socio-Cultural Community.

  11. However, this unity of ASEAN was restricted to the economic realm. In security matters, the region was and still is divided on the issue of the Spratly Islands in the South China Sea.

  12. A potential SADC customs union should not be confused with SACU. The former would include all or at least a majority of SADC’s 15 member states, whereas the later comprises only South Africa and the BLNS countries.

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Acknowledgements

I would like to thank Simon Fink, Thomas Gehring, Katharina Meissner, Johannes Muntschick, Daniel Rempe, and Axel Obermeier for their research cooperation. In addition, my thanks go to Brian Burgoon, Ursula Daxecker, Luc Francen, Sijeong Lim, Miriam Prys, Geoffrey Underhill, Dawid Walentek, and three anonymous reviewers for their comments on earlier versions of this article. Finally, a special thanks goes to Anne Fleming for proofreading the final manuscript. All remaining mistakes are of course my own.

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    Sebastian Krapohl

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The title The Games Regional Actors Play is a reference to Fritz W. Scharpf’s book ‘The Games Real Actors Play’ (Scharpf 1997).

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Krapohl, S. Games regional actors play: dependency, regionalism, and integration theory for the Global South. J Int Relat Dev 23, 840–870 (2020). https://doi.org/10.1057/s41268-019-00178-4

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