Abstract
In common use, ‘integration’ normally describes either the process of unifying diverse parts into a harmonious whole, or the stage which such a process has reached. The first represents, obviously, a dynamic and the second a static concept.
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Notes and References
Seers and Vaitsos (1980, p. 2).
Ibid.
The concepts are applicable, of course, at all levels of economic activity: sectoral, regional, national and international.
Observing the very limited success which the USSR and its East European allies have had in the attempt to integrate their economies, Brabant (1980, p. 6) makes the obvious, yet frequently ignored, point that: ‘It is certainly not an inevitable sequence of events that the acceptance of a political document on integration with that name will almost automatically entail the emergence of the relevant economic processes.’
Balassa’s definition of economic integration which is often quoted in the literature is, therefore, quite inadequate. According to him, ‘as a process, it encompasses measures designed to abolish discrimination between economic units belonging to different national states; viewed as a state of affairs, it can be represented by the absence of various forms of discrimination between national economies’ (Balassa, 1962, p. 1). A little later, Balassa links economic integration with trade liberalisation in even stronger terms: ‘The removal of trade barriers in a free trade area, for example, is an act of economic integration’ (ibid., p. 2n). Not necessarily! As argued above, it is simply ‘an act’ of opening up the economy, which may or may not lead to integration!
The Council for Mutual Economic Assistance comprising the USSR and its East European allies, better known as ‘Comecon’.
See the relevant chapters in El-Agraa (1982).
Consideration of the national interest will normally make governments act with a good deal of caution when liberalising their commercial policies. It is for this reason that, as the CMEA (‘Comecon’) experience shows, international economic integration will proceed very slowly when it is controlled tightly from the centre. (See, for instance, Brabant 1980, Schiavone 1981 and Lavigne 1975 for a discussion of the CMEA problems.) Disagreements about resource allocation are also likely to be frequent, as all of them may want to introduce certain new industries, or refuse to contract those which they had developed at considerable cost behind protective barriers. Cf. Berend (1971), El-Agraa(1982).
According to one student of economic developments in the EEC, US transnational have contributed more to the rapid economic integration of the member states than have their own firms (Pelkmans 1983, p. 18).
As a closed economy is not exposed to continuous shocks and changes from the outside, its rate of economic progress will be dictated by its own inventiveness and institutional adaptability. An open economy will be in a similar position only if it is one of the pace-setters, in other words, one of the countries which generate changes in tastes, products and production techniques to be followed by the rest of the world. Otherwise, its economic welfare (employment and incomes) will be influenced significantly, for reasons to be discussed in later chapters, by the rate at which it absorbs, relative to the rest of the world, technical and institutional advances made in other countries.
In other words, the attitudes and patterns of behaviour which Duesenberry (1949) observed and analysed within the United States, become increasingly apparent on a global scale.
The importance of this relationship is discussed in some detail in Panić (1978).
Panić (1976), Hirsch and Goldthorpe (1978), Courchene (1980).
See Wright (1984) for a description of the British experience since the end of the nineteenth century.
Cf. Kuznets (1966, pp. 311 and 315).
Lewis (1955) provides an excellent analysis of these factors.
Even at the end of the 1960s, a decade in which so much was done to liberalise international trade, the degree of protection was greater and, consequently, the extent of international specialisation was smaller in standardised goods than in either primary or differentiated products. Cf. Hufbauer and Chilas (1974).
Cf. Bairoch (1976a), Maizels (1963), Kuznets (1967), Green and Urquhart(1976).
Hirschman (1945, p. 146).
Robertson (1938).
Hicks (1953).
Mundell (1957).
It is for this reason that a large country with high per capita incomes will often tend to adopt such technical advances originating abroad much more quickly than the nations which have made them.
As Dunning (1983) shows, this has been the case throughout this century, the period for which reasonably comparable data are available.
See Linder (1961).
Cf. Chandler (1977), Scherer (1980). Increasing returns to scale can be observed in most modern activities, though the scope for achieving them varies, often significantly, between different industries. See Pratten (1971).
See, for instance, Krugman (1980) and Lancaster (1980).
As Marshall pointed out, external economies consist of ‘the many various economies of specialised skill and specialised machinery, of localised industries and production on a large scale’, the ‘increased facilities of communication of all kinds’, trading expertise and so on (Marshall [1920] 1956, pp. 267 and 365–6).
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© 1988 Dr Milivoje Panić
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Panić, M. (1988). The Process of International Economic Integration. In: National Management of the International Economy. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-07129-6_1
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