Problem

Imbalances in the distribution of the costs and benefits of economic integration

Nature:
Integration schemes have the tendency to favour the more advanced members of a grouping who benefit from the liberalization of trade and the expansion of their markets, while the less advanced members of a grouping tend to gain less, unless the scheme provides for structural changes in the latter countries. It is generally true that the special problems facing the less advanced countries include not only the smallness of their markets, but more particularly the absence of supplies exportable to the other partners of their grouping.
Claim:
The problem of effective participation of less advanced countries in the economic cooperation and integration process has been overshadowed by the general phenomenon of debt, payments imbalances and the adjustment crisis, in several cases affecting all member countries of regional groupings. That problem continues to persist and to resurface, and prejudice the development of most developing countries to a far greater extent than those countries already developed.
Counter Claim:
So as not to become self-defeating, measures taken with a view to correcting imbalances in the distribution of costs and benefits must not obstruct the development of the region as a whole. Some measures which are necessary to deal with short-term problems may not be sufficient to correct underlying imbalances, while other measures appropriate for the latter purpose would not be useful for resolving immediate problems. There is a danger that exclusive concern with long-term problems may allow short-term problems to assume such proportions that a crisis is provoked. In that case progress towards the solution of long-term problems will at best require far more time than would have been needed if emergency provisions had been available in the first place; at worst, the grouping dissolves without having had the opportunity of tackling the long-term problems at all.
Problem Type:
D: Detailed problems
Date of last update
01.05.2000 – 00:00 CEST