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Promoting Domestic Reforms Through Regionalism

45 Pages Posted: 17 Oct 2011  

Philippa Dee

Australian National University - Crawford School of Public Policy

Anne M. McNaughton

Australian National University - ANU College of Law

Multiple version iconThere are 2 versions of this paper

Date Written: October 17, 2011

Abstract

There is a strong presumption among economists that domestic reforms are promoted by regionalism. Yet strong empirical evidence for this proposition is lacking. This paper examines both the theoretical arguments and empirical evidence on this issue, drawing on the relevant economic, political, and legal literature. The authors argue that in general, the case for reciprocity in domestic reforms is weak. In the one case where a regional agreement appears to have promoted domestic reform - the European Union (EU) - the enforcement mechanisms used by the European Court of Justice played a significant role. But those mechanisms are not unique. Instead, the authors argue that the EU’s success was because domestic constituents were empowered to take action against uncompetitive regulation. Thus the EU promoted economic reform in sensitive, behind-the-border areas because it overcame the problem of loss of sovereignty by internalizing the political battle to domestic interests, and yet still provided a non-political frame of reference for the debate.

Keywords: domestic reforms, regionalism, regional agreements, European Union

JEL Classification: D02, D04, D78, F13, F15, F53, F55

Suggested Citation

Dee, Philippa and McNaughton, Anne M., Promoting Domestic Reforms Through Regionalism (October 17, 2011). ADBI Working Paper No. 312. Available at SSRN: https://ssrn.com/abstract=1945146 or http://dx.doi.org/10.2139/ssrn.1945146

Philippa Dee (Contact Author)

Australian National University - Crawford School of Public Policy ( email )

Crawford Building (132)
Lennox Crossing, ANU
Canberra, Australian Capital Territory 0200
Australia

Anne M. McNaughton

Australian National University - ANU College of Law ( email )

Canberra, Australian Capital Territory 0200
Australia

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