The project covers three main themes. The first is the relation between regional economic integration and global economic governance. Does regional integration – relating to trade, foreign direct investment (FDI), finance and monetary policies – stand in contrast to global initiatives or can it be regarded as a stepping stone towards greater global economic cooperation and integration? Does regional integration contribute to a segmentation of the world economy or should it be rather viewed as a stabilising factor? How far are regional integration processes and the emergence of regional schemes around the world necessitating and driving reform of international institutions like the World Trade Organisation (WTO) or the International Monetary Fund (IMF)?

The second theme addressed within the project are the potential effects of regional integration on economic growth and development. There are many channels by which regional economic integration might impact the national, regional and global economy. Regional trade and investment agreements are likely to have direct consequences for trade flows and the attraction of foreign investment and thus also on a country’s or region’s economic growth prospects. Similarly, regional monetary integration might have effects on trade, but also on macroeconomic stabilisation and the development of regional capital markets. The development of regional financial markets, in turn, could help an efficient allocation of resources and contribute to greater economic stability by averting the currency mismatches that plague countries with weak currencies and weakly developed capital markets.

The third theme is the special role of the big emerging economies Brazil, China, India and South Africa in regional integration processes. These four economies, which together make up about 41 percent of the world’s population are not only becoming increasingly more important for the world economy, they also exert ever-increasing influence on a regional level. By their sheer economic and population size alone, they shape the regionalisation processes with their neighbours and impact on regional and global economic governance. Do they actively encourage regional integration and seek to dominate their respective regions? Or is regional integration taking place more as a by-product of these countries’ mounting economic power and influence, with their regional neighbours trying to respond to and benefit from their growing weight in the world economy?

A conference on Regional Economic Integration beyond Europe was hosted at Deutsches Institut für Entwicklungspolitik / German Development Institute (DIE) on December 19-20, 2007.