Winners and Losers from Regional Integration Agreements

15 Pages Posted: 9 Oct 2003

See all articles by Anthony J. Venables

Anthony J. Venables

University of Oxford; Centre for Economic Policy Research (CEPR)

Abstract

How are the benefits and costs of a customs union divided between member countries? Outcomes depend on the comparative advantage of members, relative to each other and relative to the rest of the world. Countries with a comparative advantage between that of their partners and the rest of the world do better than countries with an 'extreme' comparative advantage. Consequently, integration between low income countries tends to lead to divergence of member country incomes, while agreements between high income countries cause convergence. Results suggest that developing countries are likely to be better served by 'north-south' than by 'south-south' agreements.

Suggested Citation

Venables, Anthony J., Winners and Losers from Regional Integration Agreements. Economic Journal, Vol. 113, pp. 747-761, October 2003. Available at SSRN: https://ssrn.com/abstract=452761

Anthony J. Venables (Contact Author)

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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