Re evaluating regional organizations behind the smokescreen of official mandates

4 Economic Development and Crises 556.2 External and Internal Regime Constraints 81 Part II The Universe of Regional Integration Organizations 7 Determinants of RO Type: Large-N Evidence

Organizations

Regional Organizations

Behind the Smokescreen of Of ficial Mandates

Centre for Integration Studies

Eurasian Development Bank

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The authors thank Samuel Pinson for his help in preparing the finalversion of the manuscript We appreciate diligent technical assistance ofAnna Isakova Andrey Medvedev, head of cartography laboratory of theRAS Institute for Geography, produced a set of illustrative maps ofregional organizations we feature in this book We are also thankful toAnna Reeve, the editor at Palgrave Macmillan, for her efficient proces-sing of this volume and constant support We are particularly indebted

to Harley Balzer, Gaspare Genna, and Sergei Shatalov for their ous helpful remarks, which have been invaluable for the development ofthis book All mistakes remain our own

numer-v

1 Introduction 11.1 Motivation for the Book: Research Plan 1

Part I Regional Organizations: An Analytical Framework

2.2 Heterogeneity of ROs in the Extant Research 14

4 Economic Development and Crises 55

6.2 External and Internal Regime Constraints 81

Part II The Universe of Regional Integration Organizations

7 Determinants of RO Type: Large-N Evidence 93

10 Integration Rhetoric 157

10.2 The Bolivarian Alliance for the Peoples of Our

America– Peoples’ Trade Treaty (ALBA): Barter

10.3 The Organization for Democracy and Economic

12.3 Organization of Arab Petroleum Exporting

ACF EurAsEC Anti-Crisis Fund (since 2015 – Eurasian Fund

for Stabilization and Development, EFSD) ACIA ASEAN Comprehensive Investment Area

ACS Association of Caribbean States

ACT Amazon Cooperation Treaty Organization

AFAS ASEAN Framework Agreement on Trade in Services AFC asian financial crisis

AICHR ASEAN Intergovernmental Commission on Human

Rights ALADI Asociación Latinoamericana de Integración

ALBA Bolivarian Alliance for the Peoples of Our America

-Peoples ’ Trade Treaty AMU African and Malagasy Union

APEC Asia-Pacific Economic Cooperation

APTI Arab Petroleum Training Institute

ASA Association of Southeast Asia

ASEAN Association of South-East Asia Nations

ASEM Asia –Europe Meeting

BCEAO Banque Centrale des Etats de l’Afrique de l’Ouest

xi

BIMSTEC Bay of Bengal Initiative for MultiSectoral Technical and

Economic Cooperation BLNS Botswana, Lesotho, Namibia, and Swaziland

BOAD Banque Ouest Africaine de Développement

BRICS Brazil, Russia, India, China and South Africa

BSEC Organization of the Black Sea Economic Cooperation CAC Central Asian Cooperation

CACM Central American Common Market

CACO Central Asian Cooperation Organization

CAEC Central Asian Economic Community

CAEC Central Asian Economic Cooperation

CAEU Central Asian Economic Union

CAEU/GAFTA Council of Arab Economic Unity/Greater Arab Free Trade

Agreement

CAREC Central Asia Regional Economic Cooperation

CARICOM Caribbean Community

CBSS Council of the Baltic Sea States

CEE Central and Eastern Europe

CEFTA Central European Free Trade Agreement

CEI Central European Initiative (Eastern Partnership)

CEMAC Economic and Monetary Community of Central Africa CEPEA Comprehensive Economic Partnership for East Asia CEPGL Economic Community of the Great Lakes Countries CEPT common e ffective preferential tariff

CETA Comprehensive Economic and Trade Agreement

CGS Council of Gulf States

CILSS Permanent Interstate Committee for Drought Control in

the Sahel CINC composite index of national capability

CIS Commonwealth of Independent States

CMI Chiang Mai Initiative

COMECON Council for Mutual Economic Assistance

COMESA Common Market for Eastern and Southern Africa CSO civil society organization

CSTO Collective Security Treaty Organization

CU Customs Union

DR-CAFTA Dominican Republic-Central America Free Trade

Agreement EAACM Euro-Asian Association for Coal and Metals

EAEU Eurasian Economic Union

EAFTA East Asian Free Trade Area

EBID ECOWAS Bank for Investment and Development

ECCAS Economic Community of Central African States

ECLAC Economic Commission for Latin America and the

Caribbean ECO Economic Cooperation Organization

ECOALBA-TCP Economic Space of ALBA-TCP

ECOWAS Economic Community of West African States

EFTA European Free Trade Association

EIU Economist Intelligence Unit

EPA Economic Partnership Agreement

EurAsEC Eurasian Economic Community

FDI foreign direct investment

FOB (value) free on board (value)

FSU (states) former Soviet Union (states)

FTAA Free Trade Area of the Americas

FTAAP Free Trade Area of the Asia-Pacific

G3 Group of Three (Colombia, Venezuela, and Mexico) GATT 1994 General Agreement on Tariffs and Trade 1994

GCC Gulf Cooperation Council

GCI Global competitiveness index

GDP Gross domestic product

GERD Gross expenditure on R&D

GIC Gulf Investment Corporation

GMS Greater Mekong Subregion

GUAM Organization for Democracy and Economic Development ICAS Interstate Council of the Central Asia States on the Aral

Sea Basin Problems IDB Islamic Development Bank

IEA International Energy Agency

IGAD InterGovernmental Authority on Development

IMF International Monetary Fund

LAFTA Latin American Free Trade Association

LAIA Latin American Integration Association

LAS League of Arab States

LCBC Lake Chad Basin Commission

MERCOSUR Southern Common Market

MFN most favoured nation (regime)

MSG Melanesian Spearhead Group

NAFTA North American Free Trade Agreement

NATO North Atlantic Treaty Organization

NGO Non-governmental organization

OAPEC Organization of Arab Petroleum Exporting Countries OAS Organization of American States

OAU Organization of African Unity

OCAC Organization of Central Asian Cooperation

OECS Organization of Eastern Caribbean States

OLADE Latin America Energy Organization

OMVG Gambia River Basin Development Organization

OMVS Senegal River Basin Development Authority

OPEC Organization of the Petroleum Exporting Countries OSCE Organization for Security and Cooperation in Europe

PICE Argentina-Brazil Integration and Economics Cooperation

Program PRC People’s Republic of China

R&D Research and development

RATS Regional Antiterrorism Structure

RBK CU Russian Federation – Belarus – Kazakhstan Customs

Union RCEP Regional Comprehensive Economic Partnership

RIA Regional integration agreement

RID Regional Integration Database

RSA Revenue sharing arrangement

RTA Regional trade agreement

SAARC South Asian Association of Regional Cooperation

SACU Southern African Customs Union

SADC Southern African Development Community

SAM Single Aviation Market

SCO Shanghai Cooperation Organization

SELA Latin American and Caribbean Economic System

SPARTECA South Pacific Regional Trade and Economic Cooperation

Agreement SPECA United Nations Special Programme for the Economies of

Central Asia SPS Sanitary and phytosanitary measures

SREB Silk Road Economic Belt

SUCRE Sistema Unitario de Compensación Regional de Pagos SWIFT Society for Worldwide Interbank Financial

Telecommunications TAC Treaty of Amity and Cooperation

TBT Technical barriers to trade

TBTF Too-big-to-fail (financial institutions)

TPP Trans Pacific Partnership

TPSEP/P4 Trans-Pacific Strategic Economic Partnership Agreement TTIP Transatlantic Trade and Investment Partnership

UK United Kingdom (of Great Britain and Northern Ireland)

UNMIL United Nations Mission in Liberia

UNSD United Nations Statistics Division

US United States (of America)

USSR Union of Soviet Socialist Republics

VER Voluntary export restraint

WAEMU West African Economic and Monetary Union WAMA West African Monetary Agency

WAMI West African Monetary Institute

WAMZ West African Monetary Zone

WAPP West African Power Pool

WTO World Trade Organization

ZOPFAN Zone of Peace, Freedom, and Neutrality

Fig 1 Types of regional organizations 20

percen-tage of the ROs’ total exports ((a) – full sample without EU

xvii

Table 1 Reasons why various non-traditional RO types exist 40

Introduction

1.1 Motivation for the Book: Research Plan

In 1951, six European countries set up the European Coal and SteelCommunity (ECSC) – an international organization aimed at creating acommon market for coal and steel The ECSC’s ultimate contribution,however, extended beyond this particular sector It became a first steptoward European integration; its key institutions – the High Authorityand the Common Assembly – served as the forerunners of the EUCommission and European Parliament The ECSC was thus theembodiment of an ‘active’ organization Some 40 years later, in 1993,

11 countries of post-Soviet Eurasia agreed to create the Euro-AsianAssociation for Coal and Metals (EAACM), again with the goal ofestablishing a common market in the area However, unlike the ECSC,the EAACM did not assume any functions from the outset Of its 11members, only 3 (mainly Russia) provided funding to the regional orga-nization, and on an irregular basis at that In 2000, the organization’sactivities were audited, uncovering serious financial violations In 2003,member countries decided to disband the organization, and the Russianparliament ratified the decision in December 2005 The Euro-Asian

© The Author(s) 2017

E Vinokurov, A Libman, Re-Evaluating Regional Organizations,

DOI 10.1007/978-3-319-53055-0_1

1

Association for Coal and Metals’ condition during these 12 years is bestdescribed as a‘Coma’ The intentions of countries were extremely differ-ent from the beginning While the hopes for the ECSC went beyond thepurely economic co-operation– the organization should have functioned

as a key tool preserving peace in Europe– the EAACM followed the logic

of bureaucratic rent-seeking, and to some extent was created just to imitatethe ECSC and thus the‘legitimate’ European approach to regionalism.While the ECSC secured a place in history textbooks, EAACM isunknown even to most Eurasian integration experts These two organiza-tions are located at opposite ends of a spectrum of regional organizations.They demonstrate a striking feature of the contemporary regionalism thathas become a profound global phenomenon since World War II –enormous variation in the performance of regional organizations

We can analyze this diversity of outcomes in two ways On the onehand, one can try to divide regional economic organizations according totheir success Some achieve significant progress in terms of regionalintegration Others set less ambitious goals but manage to implementthem Finally, many ROs fail to implement their declared objectives oreven demonstrate some tangible level of the integration This book,however, pursues a different approach We argue that organizations that

do not produce any tangible outcomes in terms of their declared goalsmay still be valuable in the eyes of their member countries’ elites andbureaucrats Thus, the proliferation of regional organizations in differentparts of the world serves different purposes: what may appear to be animplementation gap is actually a reflection of the multitude of politicaland economic goals regional organizations can achieve In some cases,regional organizations originally created to promote economic integrationassume political or even security functions, making significant progress

in these areas Sometimes regional organizations are co-opted by cracies – both the supranational and national civil servants responsiblefor regionalism – and used to extract rents Occasionally, regionalorganizations are set up just as a pretext for high-level political meetingsthat would be difficult or costly to organize otherwise

bureau-Acknowledging this multiplicity of goals is important for two reasons.First, it forces us to investigate a broader set of possible outcomes for theactivities of regional organizations across the world Generally, outcomes

of regionalism remain inadequately analyzed in comparative regionalintegration studies.1Much of the literature (originating in the economicsresearch on regionalism) concentrates on identifying regional organiza-tions’ trade creation effects or their ability to influence market integration.However, for many organizations other, non-traditional outcomes could

be far more important These outcomes may be both positive and tive For example, an ostensibly economic regional organization canpromote peace in the region by facilitating communication among leadersduring a crisis At the same time, a regional organization may become atool for authoritarian regimes to consolidate power, using it as a source oflegitimacy Second, this approach goes far in explaining the prevalenceand longevity of regional organizations: similarly designed economicregional organizations appear in different regions even though their coun-tries face very different problems and challenges

nega-From this point of view, this book pursues two related researchquestions: first, what motives explain the continued existence of regionalorganizations incapable of (or unwilling to) achieve their officially declaredgoals? Second, what factors determine the prevalence of particular goalsamong certain regional organizations? How do these factors change overthe life of the regional organization?

From these perspectives, our book builds and expands on NewRegionalism,2 explicitly calling for an abandonment of EU-centrism inregional integration comparative studies and acknowledgement of thediverse approaches to regionalism However, our analysis is simultaneouslynarrower and broader than that of New Regionalism On the one hand,unlike New Regionalism literature, we only look at formal regional orga-nizations (which are but one aspect of regional interconnections, which canalso include informal alliances and coalitions and microlevel economic andsocial ties) On the other hand, we attempt to systematically examinethe diverse objectives regional organizations can pursue, which, to ourknowledge, has not yet been undertaken in the literature

1

Börzel and Risse 2016a

2 See, for example, Söderbaum 2015 for a recent summary of the discussion of this scholarly tradition.

1.2 Approach and Methodology

The investigation in this book follows a two-step approach We start byidentifying the major types of regional organizations that we will study.While the literature contains numerous typologies of regional organiza-tions, they mostly concentrate on the ROs’ design and policy scope Ourstudy intends to identify politicians’ and bureaucrats’ rationale for theexistence of regional organizations Accordingly, we begin by distinguish-ing between expressive and instrumental use of regional organizations Thedistinction between expressive and instrumental behavior is frequentlyused in the social sciences: individuals’ actions can be motivated by thedesire to achieve certain goals or by the utility they extract from the actionsthemselves Comparative regionalism literature, however, has not yet usedthis distinction Rational choice literature on regional organizations hasalmost exclusively focused on instrumental goals, that is, regional organiza-tions’ ability to affect policy outcomes In constructivist studies, regionalorganizations are seen as a means of‘inventing’ regions and consolidatingregional identity This is different from the concept of expressive behavior,which assumes certain preferences but argues that they can be satisfied byimplementing an action (in this case, joining or maintaining a regionalorganization) alone, regardless of whether this action achieves any parti-cular goals This distinction is useful, because often the only thing regionalelites and bureaucrats need from regional organizations is to be able tomention them in the domestic or international political discourse Thus,even essentially powerless regional organizations have a certain value forthem We also introduce a number of additional objectives, for example,regional organizations’ communication function and their ability to extractrents for regional bureaucrats

As a result, we construct a typology of six major types of regionalorganizations To make things livelier, we call them‘Alive and Kicking’,

‘Integration Rhetoric’, ‘Talking Club’, ‘Zombies’, and ‘Coma’ The

‘Alive and Kicking’ type is further subdivided into ‘Straight Path’ and

‘Alternative Path’ regional organizations We then focus on particularfeatures of the regional political and economic environment that couldincrease the likelihood that a regional organization will evolve into aparticular type

We highlight the role of four factors:first, history matters A regionalorganization’s type can be determined by the existing economic andpolitical connections between its members, and by how the organizationhas evolved in the past Second, we consider the state of membercountries’ economies, including both long-term economic developmentand short-term business cycles In particular, we investigate how aregional organization’s type can be influenced by economic crises: dothey make regional organizations focused on instrumental goals morelikely to emerge? Or in this case do expressive goals become moreimportant? Third, we consider power asymmetry among member states,

as well as differing interests of the region’s dominant state and smallercountries Fourth, the political regimes of member countries play animportant role

These factors have been highlighted in existing comparative alism literature, but it mainly uses them to explain why a particulardesign was chosen for a regional organization and how large the imple-mentation gap is in terms of its objectives Our goal is more ambitious:

region-we consider how the variety of different objectives pursued by regionalorganizations affects them

We then develop a large set of hypotheses explaining the evolution ofthe regional organizations and test them empirically Our study’s empiri-cal methodology combines elements of qualitative and quantitativeinvestigation We collected a rich dataset from about 60 regional orga-nizations throughout the world and looked at their characteristics Using

a variety of quantitative indicators, we investigated which RO istics are correlated with particular types We also tried to empiricallydeduce a regional organization’s type by looking at its characteristics Wealso investigate numerous qualitative case studies on individual regionalorganizations, which are particularly appealing examples of specificobjectives regional organizations can implement While our large-Nanalysis is based on a snapshot of data and is therefore static, weattempted to design the qualitative small-N analysis to be dynamic, toconsider how regional organizations evolve over time and what factorsdrive the change

character-The evolution of ROs also means that we must consider yet anotheraspect of the lifecycle of a regional organization– its formal dissolution

Interestingly, regional organizations are dissolved only extremely rarely.Since World War II, only a handful of regional organizations havedisappeared entirely It is much more likely for a regional organization

to morph into a different regional entity Nevertheless, we examine at anumber of these rare cases, trying to find common features that leadregional organizations down this evolutionary path

1.3 Structure of the Book

The book consists of two parts In thefirst part, we present theoreticalconsiderations concerning the types of regional organizations and thefactors that influence their behavior Chapter 2develops a typology ofregional organizations Subsequently, Chapters 3–6 look at the mainfactors influencing RO evolution: historical path, economy, powerasymmetry, and political regimes The second part contains the empiri-cal analysis InChapter 7, we present the results of our large-N analysis

Chapters 8–12are devoted to individual types of regional organizationsand present empirical examples of these types in various parts of theworld: Latin America, Africa, Southeast Asia, and post-Soviet Eurasia

Chapter 13covers the dissolution of regional organizations.Chapter 14

concludes the book.3

3

The theoretical part of this book and the large-N analysis are based on results of a research project implemented with the generous support of the Eurasian Development Bank Some preliminary findings were reported in Vinokurov and Libman 2016 ; they have, however, been substantially revised and adjusted before inclusion into this book.

Part I

Regional Organizations: An Analytical

Framework

1 ‘Intergovernmental’ refers to the fact that national governments are the founders and members of these organizations It does not refer to the mode of decision-making (intergovernmental versus supranational).

Security Treaty Organization Our reference to a declared agenda is notincidental: we target organizations that officially represent themselves aseconomic ROs, i.e., organizations that claim that their economic functionsare vital.

Regional organizations we study in this book are a subset of regionalagreements Regional agreements also include signed treaties withoutany formal structures (secretariats etc.) Regional initiatives, as the term

is used in this book, include both established and (to some extent)implemented agreements (and organizations) and agreements that havebeen proposed and even signed but not implemented The distinctionbetween organizations and initiatives is often unclear since, as we willshow, ‘non-implementation’ of an agreement may be in line withmember countries’ goals For simplicity, we define initiatives, whichnever became agreements or organizations, as mere agreements thateither were never been officially adopted (signed and, if necessary,ratified) by member states or have been signed by some countries whoimmediately declared that they would never implement the agreements

in any form

Economic ROs have been among the most prolific ROs since WorldWar II, and have received much attention in comparative regionalismliterature.3To some extent, the focus on these organizations allows us tointroduce a uniform yardstick in order to compare them Generallyspeaking, two sets of criteria are typically applied to evaluate the success

of economic ROs

Using thefirst criteria, numerous studies look at the extent to which

an RO acquires authority to make relevant policy decisions, i.e., itsgovernance: the RO’s ‘institutionalization’,4 ‘delegation and pooling’,5

or ‘independence’.6 In the extreme case of a purely supranational RO,the RO’s bureaucracy is supposed to act independently of nationalbureaucracies and its decisions are binding for all members More

typically, there is a certain decision-making structure that both theorganization and its member states must comply with This line ofresearch in particular focuses at the EU as the organization with,supposedly, highest level of institutionalization and supranationaliza-tion As we will show in what follows, the fact that the EU has thestrongest authority to intervene in the domestic affairs in its memberswithout their consent is not necessarily true (although it is probably thecase that in the EU the supranational bureaucracy is particularly strongand, more importantly, particularly likely to perceive itself as indepen-dent from the national bureaucracies) Furthermore, the research inmany cases ignores the need to look at the evolution of the EU, callingupon new ROs to immediately emulate the European Union as itfunctions right now upon their creation.

Under the second criteria, the RO’s success may be measured in terms

of policy output Economists commonly look at trade creation versustrade diversion as a key‘success indicator’ for ROs.7Other criteria couldinclude convergence of macroeconomic indicators,8price convergence,9

or implementation of shared infrastructure projects Economic textsfrequently refer to ‘market integration’, which occurs if trade barriersbetween two originally separate markets disappear to the extent thatthere are no arbitrage opportunities This is the ultimate measure ofeconomic interdependence.10 The concept of ‘economic integration’ as

an outcome of an RO’s activities is, somewhat confusingly, used todescribe both a goal, e.g., economic interdependence (in economics,also frequently described as market integration) and the growing power

of the RO and its decision-making structures.11

7 For example, Venables 2003

11

The literature occasionally distinguishes between ‘integration’ and ‘cooperation’ Cooperation refers to more ‘shallow’ interaction between governments, e.g., the intention to implement common projects, while ‘integration’ refers to the creation of a common regulatory framework for removing barriers between markets See also a related discussion in Devlin and Estevadeordal 2003

‘Institutionalization’ (or any other aspect of the accumulation ofauthority and power) and‘market integration’ are not always correlated.

An organization may ‘succeed’ in terms of setting up a functioninginstitutional framework, but the same organization may have little impact

on trade flows and economic linkages, and vice versa Moreover, othereconomic and social costs may accompany a high level of institutionaliza-tion For example, a supranational bureaucracy may implement sub-optimal economic policy or intervene in areas where centralization isundesirable.12 From a normative perspective, this makes achieving the

‘highest possible’ institutionalization (frequently referred to as the highestpossible level of‘integration’ in the policy debate) questionable

Even more importantly, the goals of ROs may vary; many tions do not even seek the highest possible level of institutionalization ormarket integration, pursuing instead more specific, modest objectives,e.g., by focusing on particular sectors or industries However, ROs’declared goals are far less diverse than their actual performance Thiscan be explained by a number of factors Countries are pushed to selectsimilar plans and declare similar goals for ROs, regardless of theirintentions, by the legitimacy concerns, i.e., the normative power of the

organiza-EU, which is considered the only‘legitimate’ form of an RO by manyepistemic communities and is therefore emulated worldwide,13 or thediffusion and learning mechanism that makes ROs imitate each other.14The similarity of declared objectives appears to be one of the reasonswhy many ROs do not even achieve their relatively modest official goals.This phenomenon is typically described as an implementation (or perfor-mance) gap15: after agreeing to certain commitments within an RO, itsmembers systematically disregard their obligations

In this book, we argue that self-identification as an ‘economic RO’does not necessarily mean that the organization’s architects actuallypursue the goals of market integration or the creation of an autonomous

international organization in the area of economic policy-making Otherobjectives pursued under the pretense of an economic RO may play aneven more important role Occasionally, stakeholders may view whatappears to be an underperforming RO as essential organization preciselybecause of its underperformance in economic matters Certainly, thisraises the question of why ROs speak of goals and objectives that theirfounders do not actually want to achieve We will also discuss thisquestion In any case, we must recognize that ROs’ de jure sharedgoals may hide a universe of diverse organizations.16

As afinal note, we have to remark that the set of actors initiating theROs and affecting their development at any moment of their evolutionalso differs substantially There are two aspects of this diversity On theone hand, ROs are formally created by countries, but different countrieshave different approaches to how exactly they want to advance theirforeign (economic) policy agenda Some concentrate on purely eco-nomic mechanisms; others see economy as merely a tool of enhancingsecurity; some have a strong ideological bias in their decision-making.17

In this sense, the identity of the countries (or of the leading country),which create the RO, is essential for their actual objectives On the otherhand, as we will argue in what follows, one needs to unpack the notion

of a ‘country’, which frequently hides numerous different actors (e.g.,bureaucracies with their own goals) and acknowledge the importance ofprivate actors (e.g., multinational corporations or labor unions) andother ROs (with their intended and unintended impact on the region-alism beyond their borders) – this will play an important role in thecontext of this book

16 For simplicity, we will assume that ROs do have ‘actual’ goals that exist hidden behind economic rhetoric, but we acknowledge that in many cases the situation is more complex ROs redefine their goals as they develop; conflicting ideas about what an RO should do are pursued by different groups within individual countries Even within the mind of a single decision-maker the purpose of the RO may be unclear Nevertheless, our approach is necessary to construct a coherent theoretical framework, which we will of course refine and develop when looking at individual ROs.

17

Examples include the change in attitude of South Africa to the design of SACU before and after the democratization or differences between Russia and China as key countries of the SCO with very different foreign policy attitudes, see, e.g., Balzer 2008

2.2 Heterogeneity of ROs in the Extant

typology of ROs– bly the most frequently used typology of ROs in economics– is based onthis approach) or by examining the‘implementation gap’, e.g., the differ-ence between ROs’ declared goals and what they have actually implemen-ted From this point of view, several empirical studies have suggested anumber of ways to measure RO performance20or, without ranking them,

possi-to identify various decision-making mechanisms used by ROs (with thesimplest distinction being between intergovernmental and supranationalROs21) and the underlying economic model (most prominently, ‘openregionalism’22 and various alternative forms of regionalism in LatinAmerica23) ROs can also be distinguished based on the analogy ofcomplete contracts (i.e., well-defined and narrow goals that do not allowfor spillovers leading to increased integration) and incomplete contracts(framework agreements that can befleshed out and expanded by member

states in different ways),24or in terms of their focus on sovereignty, publicgoods provision or market integration.25These typologies and metrics donot explicitly focus on the heterogeneity of ROs’ goals, which is the maintopic of investigation for this book.

Some authors occasionally refer to other goals ROs may pursuebeyond the actual economic goals This is the subset of studies that areespecially important for this book A growing literature examines ROsused for purely rhetorical domestic purposes (which we refer to as

‘Integration Rhetoric’ ROs) and ROs used by bureaucrats as merebudget-wasting machines (‘Zombies’) We will discuss these paperswhile introducing the particular types of the ROs inSection 2.4.However, few studies attempt to systematically explore different poten-tial approaches to architecting ROs One way to deal with ROs’ hetero-geneous goals was suggested by Söderbaum.26 Looking at Africanregionalism, he distinguishes between three types of regional governance:neoliberalism (focused on removing barriers that prevent markets fromintegrating in a region), sovereignty-boosting (used to support members’official status and statehood), and shadow networks (focused on extractingrents and advancing leaders’ personal pecuniary interests) Acharya alsorefers to various forms of regionalism based on the different goals pursued

by member members, though his analysis is not explicitly limited to ROs:regionalism can represent a hegemon’s sphere of influence, a conflictmanagement tool, an expression of common identity, a way to advancepeace through economic integration, a tool to further decolonization, amechanism to promote an alternative to the influence of great powers, and

a means to promote economic development.27 Our list of goals will benarrower than in Acharya’s research, since we only consider organizationsthat have defined themselves as economic organizations At the same time,

it will be broader than Söderbaum’s, because we hope to include a number

of additional possible goals behind the development of ROs

2.3 Four Sets of Goals

As a starting point for our typology, we introduce four sets of goals ROscan pursue regardless of their ‘integration rhetoric’: instrumental goals(common policy), expressive goals (membership in the RO), rent-seekinggoals, and communication goals

The contradiction between instrumental and expressive goals is notnew to social sciences, especially economics and sociology.28Instrumental behavior is assumed to be behavior by which actorsattempt to achieve a specific result, and extract utility from this out-come In expressive behavior, utility is derived from the action itself,regardless of whether it leads to any specific outcome Voting is a contextwhere this distinction is important Instrumental voting happens ifindividuals vote in order to change or maintain a certain policy.Expressive voting happens if individuals enjoy the act of voting itself(because they consider it a civic virtue or a social activity) Similarly,instrumental participation in a regional organization implies that coun-tries use the RO to implement certain policies Expressive participationimplies that the goal of participation is the participation itself: even if theorganization does not have any influence on policies, it still providescertain‘results’ for the member states

ROs’ instrumental goals vary as well On the one hand, instrumentalgoals may coincide with a regional organization’s officially declaredgoals: e.g., to facilitate commerce, to remove market barriers, or tocoordinate macroeconomic policies But there is further variation inthese openly declared goals Some ROs are still designed based onBalassa’s logic, which emphasizes the role of trade (free trade area andcustoms union) at an early stage of regionalism and then a transition tofree movement of capital and labor and coordinated policies (economicunion) only at later stages.29Organizations of this type frequently mimicthe EU’s institutional structure to some extent An alternative is to

28

Hillman 2010 ; Lin 2002

29 Even in this case actual market integration may be a subordinated goal of regionalism, see Fernandez and Portes 1998

concentrate on abolishing boundaries for the movement of goods,capital and labor at an earlier stage of regionalism, while simultaneouslyallowing very limited policy coordination This approach, which hasbeen used to a degree by NAFTA, is very closely related to the idea of

‘open regionalism’ in East Asia (ASEAN, see Chapter 9).30 Finally,economic cooperation may focus on developing common infrastructureand overcoming inadequate physical connectivity rather than creatingcommon regulation Many Asian ROs pursue this objective.31 This isalso typical of river basin organizations around the world (seeFig 3in

Chapter 7)

On the other hand, instrumental goals may include issues entirelyunrelated to the economy (though they are pursued by ROs) In theextreme, ROs whose original focus was economic turn into universalorganizations, engaging in political, social and even security cooperation.The EU is again an excellent example of such a broadening of goals, butthe EU developed instrumental non-economic goals after successfullyimplementing economic goals We will show that organizations concen-trate on non-economic goals even though their economic goals (definedboth in terms of the RO’s autonomy and market integration) have notbeen achieved and the ROs still identify themselves as economic ROs.Instrumental and expressive goals cover the majority of RO objec-tives, but we also include two secondary goal types Strictly speaking,they could be described as either instrumental or expressive goals, but ROswhere these goals dominate are substantially different from other organi-zations (especially in terms of what is typically perceived as the ‘imple-mentation gap’) These two goals (rent-seeking and communication)are below

First, it is overly simplistic to argue that member states determine thedesign of regional organizations: national policies are merely aggrega-tions of numerous political interests operating under specific political

30

Bergsten 1997

31

The focus on physical connectivity is observed especially often in Asian ROs (Bhattacharyay

2010 ) It is also the main element of the Chinese Silk Road Economic Belt (SREB) initiative, though this is not a regional organization.

institutions.32 In most cases, these interests are either concerned aboutpolicies ROs can implement (instrumental goals) or the benefits ofbelonging to the ROs (expressive goals) As mentioned previously,Söderbaum indicates that ROs are sometimes used as tools for rent-seeking, i.e., they are seized by particular groups who use regionalintegration (e.g., large projects) as a source of revenue (‘shadow region-alism’) In some cases, these groups receive revenue by affecting policy(e.g., in a customs union, by influencing the common customs tariff),but in other cases rents can be extracted merely from the RO’s activities,regardless of the policies it implements Typically, these rents are cap-tured by bureaucrats in the ROs’ secretariats and at the national level.They may take the form of large salaries, an attractive workplace andbenefits, access to budgets, etc These rewards do not entirely correspond

to instrumental goals (because the organization does not need to be able

to affect policy for the bureaucrats to benefit) or expressive ones (becauserent-seeking requires more than the organization’s mere existence).Second, ROs are sometimes created and maintained not because oftheir ability or intention to influence policies and not because they areimportant in terms of rhetoric, but because of a by-product of theirexistence: regular high-level summits Summits allow the leaders ofmember states to communicate with each other regularly and conveni-ently This communication may be entirely unrelated to the RO’s pri-mary mandate The RO’s existence simply provides a platform andoccasion for meetings We stress throughout the book that this func-tion can be very useful and, in any case, is not trivial While in someparts of the world leaders communicate regularly as a matter of course,regions comprised of developing countries often find it difficult tomaintain an ongoing dialogue between leaders ROs can provideadded value to stakeholders in this respect Again, the RO’s goal here

is not expressive, since the RO’s mere existence is insufficient – regularhigh-level meetings are necessary The goal is somewhat instrumental,i.e., the RO is used to achieve a certain outcome, but it is achieved even

32

Lake 2008 ; Bueno de Mesquita and Smith 2012

if the RO has no policy relevance, i.e., the apparent implementationgap is very large.33

Again, we have to stress that different actors typically have differentideas about the goals RO should implement These perceptions are notcarved in stone: they change over time depending on the evolution of the

RO itself or the evolution of the actors (e.g., changes in their identityand self-perception, or in their budget constraints and resources) Inmany cases, actors do not articulate their goals for the ROs (possibly,even for themselves – the very value of expressive behavior comes fromnot acknowledging that the behavior is purely expressive) Since our goal

is to present a typology of ROs, we look at the final outcome, i.e., theobjective a RO serves at a certain point of its evolution; but one shouldnot forget that thisfinal outcome is typically a product of interaction ofnumerous actors and stakeholders with their own goals and objectives

Based on these four types of goals, we propose a distinct typology ofROs, which we will use throughout the remaining chapters of the book.Overall, we identify five distinct RO types, one of which has twoimportant subtypes Thefirst four types correspond to the three motivespresented above; the last type represents the absence of any motive Tomake things livelier and simplify further exposition, we have named each

of the types as follows: ‘Alive and Kicking’, ‘Integration Rhetoric’,

‘Talking Club’, ‘Zombies’, and ‘Coma’ ‘Alive and Kicking’ ROs are

in turn subdivided into‘Straight Path’ and ‘Alternative Path’ ROs Wewill now present these types one by one They are summarized inFig 1

33

This certainly leads us to ask why member states would use an RO as a communication platform rather than establish an organization that openly positions itself as such We will discuss this issue later in the text Note that the presence of high-level summits itself does not make communication function the key for the functioning of the RO High-level summits may be important for expressive ROs as well, as they increase their symbolic power, as well as serve as a source of rent-seeking These rents can be extracted by both national and supranational bureau- crats and national politicians For us, the ROs where communication indeed turns out the pivotal function they provide to their member states are especially important.

Alive and Kicking: Thefirst type is the most straightforward ROs ofthis type focus on fulfilling their instrumental goals These goals can be theiroriginal economic goals or other, non-economic goals, e.g., political orenvironmental cooperation Certainly, such ROs do not implement com-mon policies perfectly (many of them suffer from an implementation gap),but at least the ROs show visible progress in achieving economic or othercooperation and integration The heterogeneity of this RO group led us todivide it into two subtypes according to how their instrumental goals changeover time ‘Straight Path’ ROs have been, from the outset, designed toimplement and systematically pursue economic integration and coopera-tion goals In fact, this is the model assumed by older regionalism literatureinspired by the European experience ‘Alternative Path’ ROs eitheremerged as non-economic ROs and eventually assumed economic func-tions or as economic ROs that ultimately came to focus on non-economicissues This shift does not necessarily happen in the RO’s goals as officiallydeclared by its institutions and members Nevertheless, it is visible in theRO’s practices In Chapter 8, we present brief case studies on three

‘Straight Path’ ROs: Latin America’s Mercosur, the world’s oldest customsunion SACU, and the lesser known and inexcusably under-researched GulfCooperation Council

None

No strong changes of goals Strong changes of goals

Straight Path

Alternative Path Integration

‘Alternative Path’ ROs are also numerous In the second part of thebook, we will explore two of them in greater detail – ECOWAS andASEAN The former was originally established as an economic RO, buteventually came to focus on promoting democracy and peace.34ASEAN,

on the other hand, started as a security organization but developed apredominantly economic agenda Another example of an ‘AlternativePath’ RO is IGAD, an unsuccessful economic RO, which was revived

to help resolve the Somalian conflict.35 The case of the EU is highlycomplex: the organization seems important in terms of economic coop-eration and integration, but over time, without giving up this objective, ithas also assumed more and more non-economic responsibilities (e.g.,security and common foreign policy).36In some cases, an RO’s transfor-mation is so substantial that its entire membership changes A uniqueexample in this sense is CEFTA This organization was created in 1992 byCentral and Eastern European countries (Poland, Hungary, CzechRepublic, and Slovakia) After these countries joined the EU, CEFTAcontinued as a trade agreement among Moldova and Balkan countriesthat had not yet joined the EU but aspired to Basically, the RO became

an EU economic policy instrument toward its neighbors Over time, theentire membership of the RO changed, as did its objectives

Rhetorical Integration: This RO type pursues expressive goals, that

is, member states extract utility from being part of the RO even ifthe organization does not implement any functions.37 Typically, thishappens if RO membership can be exploited in political rhetoric eitherinternationally or domestically

37

Montecinos 1996

The literature focuses on two motives for creating rhetorical tions Nascent states (e.g., former colonies) can use ROs to gain inter-national legitimacy In this case, being part of an RO signifiesrecognition by the international community In this sense, ROs tend

organiza-to‘boost sovereignty’.38More recent literature focuses on how ROs areused to ‘boost regimes’: non-democratic countries create ROs to useregional integration rhetoric against domestic opposition or to receivesymbolic support for their repressive activities.39Countries may refuse toestablish or join ROs with actual policy relevance, because doing socould jeopardize their newly gained independence or the current poli-tical leadership’s control) However, they still maintain ROs for rheto-ric.40In some cases, the goals of domestic political rhetoric can actually

be served by an RO’s lack of policy-relevant outcomes This happens ifdecision-makers can skillfully shift the blame for the RO’s inaction toother countries or their opponents Note that while rhetorical organiza-tions do not exercise any direct effect on policy of their members(i.e., they do not implement any agreements members have to committo), they have indirect policy relevance: they change balance of power inthe member countries and thus make the implementation of certainpolicies (and in some cases even establishment of political institutions ofcertain types) more likely.41

38

Söderbaum 2004

39

Allison 2008 ; Collins 2009 ; Cameron and Orenstein 2012 ; Schweickert et al 2012 ; Lewis

2012 ; Jackson 2014 ; Russo 2015 Note that ROs can also boost regimes through actual tion, e.g., joint military interventions, in which case they are actually ‘Alive and Kicking’ ROs This is as long as they fit into our framework by having an economic agenda However, as Obydenkova and Libman ( 2015 ) argue, in today’s world, while direct cooperation with auto- cracies does play a certain role, rhetorical support of one autocrat for another is much more common.

coopera-40

Note that sometimes countries join ROs to send signals (Dreher and Voigt 2011 ), in order to convince international investors that the country’s chosen reform path is solid However, rheto- rical organizations are rarely suited to this purpose: membership in a rhetorical organization does not represent any sunk costs and thus does not create a credible signal Countries seeking to send signals must join ‘Alive and Kicking’ organizations.

41

Börzel and van Hüllen ( 2015 ) provide a comprehensive survey of how various types of ROs exercise influence on the domestic governance of their members Obydenkova and Libman ( 2015 ) discuss the complexity of direct and indirect channels, focusing on regime boosting.

InChapter 10, we examine two vivid examples of rhetorical tion One of them is the Bolivarian Alliance for the Peoples of OurAmerica – Peoples’ Trade Treaty (ALBA) Another is GUAM, whichwas established by Georgia, Ukraine, Azerbaijan, and Moldova toemphasize their ‘anti-Russian’ stance and highlight the importance offrozen conflicts in the region.

integra-Talking Club: This RO type, just like‘Rhetorical Integration’, does nothave any influence on policies, but unlike the previous type, it has almost noimpact on its members’ rhetoric Basically, such an RO exists as an oppor-tunity to organize high-level meetings for the member states’ leaders tocommunicate Again, this can be a non-trivial and somewhat useful function

Chapter 11 contains a concise analysis of three such ROs: AsianPacific Economic Cooperation (APEC), an Asian summit-maker; LatinAmerican Integration Association (LAIA); and Shanghai CooperationOrganization (SCO), a Eurasian organization dominated by China andRussia The last example is complex, since SCO is merely a talking clubwhen it comes to economic matters but maintains a relatively activeagenda regarding security

Zombies: The notion of ‘zombies’ as a distinct RO subtype wasintroduced in the seminal work by Gray, which has been of extremeimportance for both our theory and empirical analysis.42While, as men-tioned, the idea of multiplicity of shapes of regional integration has beenpart of the New Regionalism tradition, Gray is the first to provide adetailed discussion of how bureaucratic agency matters for the develop-ment of ROs and corroborates it by detailed large-N analysis Her argu-ment focuses on the competition of ROs for talented and motivated staff,which typically occurs if there are multiple regional organizations withoverlapping members In this case, the ability of the RO to succeed– tobecome‘Alive and Kicking’, in the language of this book, depends on the

42 Gray 2012 More specifically, she distinguishes between functioning ROs, ‘Zombies’ which in a more recent version of the paper, Gray ( 2014b ) refers to them as ‘Coma’ cases, and dead ROs, which are essentially defunct organizations This language only partly overlaps with ours: Gray’s dead ROs are probably most similar to our ‘Coma’ type; Zombies or Coma ROs in Gray’s language include the whole variety of other ROs besides the ‘Alive and Kicking’ and ‘Coma’ we study in this book.

ability to attract qualified staff, which in turn is influenced by theautonomy of the supranational bureaucracy and by the attractiveness ofthe location of the secretariats The survival of ‘zombies’ is driven bythe patronage politics: politicians use them as a source of rent-seeking,e.g., associated with benefits of diplomatic passports.43

Gray, however, uses a much broader definition of this group of ROsthan we do – basically, all ROs, which are exhibiting certain level ofactivity, not producing‘economic’ outcomes are treated as ‘zombies’ (this

is the reason why, empirically, the group of ‘zombies’ in her studies ismuch larger than in our dataset) An important goal of our book is toshow that ROs can be useful for their members, even if they do notproduce economic outcomes, and thus to provide a more nuanced typol-ogy of ROs Hence, our definition of ‘Zombies’ is much more restrictive,which is necessary to highlight the complexity of functions of ROs:

‘Zombies’ maintain a substantial bureaucracy and produce numerouslegal acts and various documents (directives, programs, recommendations,framework agreements, model legislation, etc.) At the same time, theypossess no real influence over policy and are not actively used in theirmembers’ rhetoric A ‘Zombie’ imitates a functioning RO but does notproduce any outcomes for member states.‘Zombie’ bureaucracies produceoutput that is only interesting or relevant to these bureaucracies them-selves (here we echo Gray’s focus on rent-seeking in ROs)

Zombies are common in Latin America and Africa, where due to purebureaucratic inertia some organizations survive for long periods withoutproducing any substantial results However, in Chapter 12 we choseexamples from other regions to illustrate this type: Interstate Bank (ISB)from post-Soviet Eurasia and the Organization of Arab PetroleumExporting Countries (OAPEC) from the Middle East

Coma: Thefinal type includes organizations that do not exercise anypolicy influence, are irrelevant to their members’ rhetoric, and exhibit nobureaucratic activity, but are officially not disbanded In these organiza-tions, the secretariat has ceased to exist, has only a skeleton staff, or – insome cases – was never created; high-level summits do not take place

43

Gray 2015

These organizations are kept from formal dissolution only by a lack ofmember states’ final decision to disband the organization, which coun-tries may not implement for various reasons As we will later show, some

‘Coma’ ROs survive merely because they are forgotten by their bers’ leaders, bureaucrats, and citizens They can also be the result of aprolonged transition There is very little research on the‘Coma’ ROs inthe literature, and this organizations infrequently appear in comparativedatasets This is because for this type of organization (even whencompared to ‘Zombies’) essentially no information can be collected, asthey do not exercise any activity

mem-The following two examples illustrate the difference between ‘Zombies’and ‘Coma’ ROs A typical ‘Coma’ RO is the Euro-Asian Association ofCoal and Metals, which we described in the book’s introduction Asmentioned, it did not exhibit any activity – neither in terms of policy-making nor with respect to purely bureaucratic goals and objectives Theorganization is virtually unknown to practitioners and academics studyingEurasian regionalism; there is no information on its activities in themember countries’ press or Internet resources Moreover, it took fiveyears for member states tofinish dissolving it, despite an existing decision

to disband the RO Thus, itfits our definition of a ‘Coma’ RO

A typical ‘Zombie’ is, e.g., the Interparliamentary Assembly onOrthodoxy, which was created in 1993 and consists of 21 countries.The Assembly’s website (eiao.org) reveals a long list of activities, includingannual general assemblies, participation in various conferences, photocontests, etc However, there is no evidence the organization made pro-gress toward presenting (let alone implementing) specific policy initiativesfor its members Public opinion of the Assembly is almost non-existent inmost of its member countries In Russia, e.g., the Assembly is discussedalmost exclusively by church media outlets, which limit themselves toprinting official conference reports and the Patriarch of the RussianOrthodox Church’s addresses to the Assembly Even for the church theAssembly appears to be of secondary importance Thus, unlike the Coaland Steel Association, the Assembly is clearly ‘functioning’ – but notproducing any output relevant to its member states or their elites.These five types (six if we count the subtypes of ‘Alive-and-Kicking’separately) will guide our investigation through the remaining part of the