The Potential of Regional Integration Agreements (RIAs) in Enhancing the Credibility of Reform: The Case of the Syrian-European Association Agreement

Abstract

The effect of "locking-in" economic reform and enhancing its credibility is generally regarded as one of the most important potential effects of regional integration. Based on a detailed review of the theoretical debate, this paper develops a general framework for assessment to evaluate the ability of RIAs to serve as effective mechanisms for "commitment" and "signalling." In the second part, this assessment framework is applied to the case of the Syrian-European Association Agreement (AA). Syria initialled an AA with the European Union in October 2004, but two and a half years later, this agreement is still pending formal signature. The empirical findings of this study show that despite several shortcomings, the Syrian-European AA, if it were to come into force, should be able to deliver an appropriate mechanism for signalling and commitment and thus to improve the credibility of the Syrian process of reform at home and abroad. A major loophole of the agreement, however, is represented by its lack of incentives to increase the "rewards for good policy."

Keywords: Regional integration, Credibility, Commitment, Signalling, European Mediterranean Partnership, Syria

JEL Classification: F15