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Winners and losers from regional integration agreements

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  • Anthony J. Venables

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. Copyright 2003 Royal Economic Society.

Suggested Citation

  • Anthony J. Venables, 2003. "Winners and losers from regional integration agreements," Economic Journal, Royal Economic Society, vol. 113(490), pages 747-761, October.
    • Handle: RePEc:ecj:econjl:v:113:y:2003:i:490:p:747-761
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    References listed on IDEAS

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    1. Ben-David, Dan, 1996. "Trade and convergence among countries," Journal of International Economics, Elsevier, vol. 40(3-4), pages 279-298, May.
    2. Dan Ben-David, 1993. "Equalizing Exchange: Trade Liberalization and Income Convergence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 653-679.
    3. Baldwin, Richard E. & Venables, Anthony J., 1995. "Regional economic integration," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 31, pages 1597-1644, Elsevier.
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    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F15 - International Economics - - Trade - - - Economic Integration

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