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Theories of New

Regionalism
A Palgrave Reader

Edited by
Fredrik Söderbaum and Timothy M. Shaw
International Political Economy Series

General Editor: Timothy M. Shaw, Professor of Commonwealth Governance


and Development, and Director of the Institute of Commonwealth Studies,
School of Advanced Study, University of London

Titles include:
Hans Abrahamsson
UNDERSTANDING WORLD ORDER AND STRUCTURAL CHANGE
Poverty, Conflict and the Global Arena

Francis Adams, Satya Dev Gupta and Kidane Mengisteab (editors)


GLOBALIZATION AND THE DILEMMAS OF THE STATE IN THE SOUTH

Preet S. Aulakh and Michael G. Schechter (editors)


RETHINKING GLOBALIZATION(S)
From Corporate Transnationalism to Local Interventions

Sandra Braman (editor)


THE EMERGENT GLOBAL INFORMATION POLICY REGIME

James Busumtwi-Sam and Laurent Dobuzinskis (editors)


TURBULENCE AND NEW DIRECTIONS IN GLOBAL POLITICAL ECONOMY

Elizabeth De Boer-Ashworth
THE GLOBAL POLITICAL ECONOMY AND POST-1989 CHANGE
The Place of the Central European Transition

Helen A. Garten
US FINANCIAL REGULATION AND THE LEVEL PLAYING FIELD

Randall D. Germain (editor)


GLOBALIZATION AND ITS CRITICS
Perspectives from Political Economy

Barry K. Gills (editor)


GLOBALIZATION AND THE POLITICS OF RESISTANCE

Richard Grant and John Rennie Short (editors)


GLOBALIZATION AND THE MARGINS

Axel Hülsemeyer (editor)


GLOBALIZATION IN THE TWENTY-FIRST CENTURY
Convergence or Divergence?

Helge Hveem and Kristen Nordhaug (editors)


PUBLIC POLICY IN THE AGE OF GLOBALIZATION
Responses to Environmental and Economic Crises

Takashi Inoguchi
GLOBAL CHANGE
A Japanese Perspective

Jomo K.S. and Shyamala Nagaraj (editors)


GLOBALIZATION VERSUS DEVELOPMENT
Craig N. Murphy (editor)
EGALITARIAN POLITICS IN THE AGE OF GLOBALIZATION
Michael Niemann
A SPATIAL APPROACH TO REGIONALISM IN THE GLOBAL ECONOMY
Morten Ougaard
POLITICAL GLOBALIZATION
State, Power and Social Forces
Markus Perkmann and Ngai-Ling Sum (editors)
GLOBALIZATION, REGIONALIZATION AND CROSS-BORDER REGIONS
Leonard Seabrooke
US POWER IN INTERNATIONAL FINANCE
The Victory of Dividends
Timothy J. Sinclair and Kenneth P. Thomas (editors)
STRUCTURE AND AGENCY IN INTERNATIONAL CAPITAL MOBILITY
Fredrik Söderbaum and Timothy M. Shaw (editors)
THEORIES OF NEW REGIONALISM
A Palgrave Reader
Kendall Stiles (editor)
GLOBAL INSTITUTIONS AND LOCAL EMPOWERMENT
Competing Theoretical Perspectives
Amy Verdun
EUROPEAN RESPONSES TO GLOBALIZATION AND FINANCIAL MARKET
INTEGRATION
Perceptions of Economic and Monetary Union in Britain, France and Germany
Robert Wolfe
FARM WARS
The Political Economy of Agriculture and the International Trade Regime

International Political Economy Series


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Series Standing Order ISBN 0–333–71110–6 paperback
(outside North America only)
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Hampshire RG21 6XS, England
Theories of New Regionalism
A Palgrave Reader

Edited by

Fredrik Söderbaum
Research Fellow
Department of Peace and Development Research
Göteborg University, Sweden, and
United Nations University/Comparative Regional Integration Studies (UNU/CRIS)
Bruges, Belgium

and

Timothy M. Shaw
Professor of Commonwealth Governance and Development
Institute of Commonwealth Studies
School of Advanced Study
University of London
London, England
Selection, editorial matter and Chapter 12
© Fredrik Söderbaum and Timothy M. Shaw 2003
Chapters 1–11 © Palgrave Macmillan Ltd 2003
Softcover reprint of the hardcover 1st edition 2003 978-1-4039-0197-2
All rights reserved. No reproduction, copy or transmission of this
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Library of Congress Cataloging-in-Publication Data
Theories of new regionalism : a Palgrave reader / edited by Fredrik Söderbaum
and Timothy M. Shaw.
p. cm. — (International political economy series)
Includes bibliographical references and index.

1. International economic relations. 2. Regionalism. 3. Globalization.


I. Söderbaum, Fredrik. II. Shaw, Timothy M. III. International political
economy series (Palgrave Macmillan (Firm))
HF 1359.T443 2003
337.1′1—dc21 2003046942
10 9 8 7 6 5 4 3 2 1
12 11 10 09 08 07 06 05 04 03
Contents

Preface vii
Notes on the Contributors ix
List of Abbreviations xiii

1 Introduction: Theories of New Regionalism 1


Fredrik Söderbaum

2 The New Regionalism Revisited 22


Björn Hettne

3 The World Order Approach 43


Andrew Gamble and Anthony Payne

4 Regionalism and World Order: The Changing


Global Setting 63
Richard Falk

5 The Regional Project in Global Governance 81


Helge Hveem

6 Regionalism: Providing a Substance to Multilateralism? 99


Diana Tussie

7 New Regionalism and Economic Development 117


Percy S. Mistry

8 Regional Security Complex Theory in the Post-Cold


War World 140
Barry Buzan

9 A Region-Building Approach 160


Iver B. Neumann

10 The Political Economy of Scale and the Construction


of Cross-Border Micro-Regions 179
Bob Jessop

11 The Weave-World: The Regional Interweaving of


Economies, Ideas and Identities 197
Morten Bøås, Marianne H. Marchand and Timothy M. Shaw

v
vi Contents

12 Conclusion: What Futures for New Regionalism? 211


Fredrik Söderbaum and Timothy M. Shaw

Internet Resources 226


A Guide to Further Reading on New Regionalism 228
Bibliography 234
Index 252
Preface

This original collection was proposed for three interrelated reasons. First,
international relations/world politics/global political economy are in flux at
the start of the new century, even if not all analysts would admit or
acknowledge this. We believe that contemporary changes pose positive
challenges for creative analyses and policies for ‘global governance’ although
several disciplines display considerable reluctance to so respond. Second,
new forms of regionalism are emerging in response to world order flux and
the challenges of globalization (and anti-globalization) along with the
elusiveness of sustainable development. Third, in spite of a proliferation of
new definitions and debates about regionalism in the post-Cold War era,
there is surprisingly little theoretical debate and genuine communication in
the research field. In fact, until this project, there was no singular, authoritative
‘theory-book’ for the field.
We hope that this volume, containing as it does, original contributions
from some of the leading authorities in the burgeoning field, will be well
received as a graduate-level assigned or supplementary text as well as a theo-
retical state of being for the research community at large. We see this series
of original essays contributing not only to the development of established
‘disciplines’ like international relations, political science and public policy,
economics and sociology but also to embryonic yet exciting fields like civil
society, development studies, and new or critical security studies and so forth.
New regionalism is necessarily interdisciplinary in content and orientation,
even if original post-Second World War formulations of regionalism (i.e. the
‘old regionalism’) were more state-centric in approach and dominated by
political science in orientation and affiliation.
This catholic inclination is apparent in the affiliations of our contributors
as well as reflected in their (and our) research and writing. Unlike ‘old
regionalism’, the new is not a by-product of orthodox US social science,
which continues to be rather hegemonic globally. In particular, we hope to
advance communication, even integration, between different ‘schools’
(often reflective of broader theoretical divergencies) or tendencies already
apparent within the youthful field. We hope that this volume will advance
such an ‘heterogenous’ genre. We envisage it as a selection of ‘the best’ of
extant studies of new regionalism.
Many of the essays have their origins in two interrelated forums. First, original
(and in most cases, considerably different) versions of some essays (Barry
Buzan, Richard Falk, Björn Hettne and Percy Mistry) were presented in a
UNU/WIDER project on ‘The New Regionalism’, coordinated by Björn Hettne

vii
viii Preface

and resulting in a five-volume mini-series published by Macmillan/Palgrave


between 1999 and 2001. And second, such analyses and related debates
have been advanced since the late 1990s through a series of interlocking
workshops, networks and meetings, for instance IPSA RC#40 on ‘New World
Orders?’, ISA Global Development Section and EADI Working Group on
‘New Regionalisms and Global Development’. Many of these would not
have been possible or constructive without the energy and creativity of
Morten Bøås, Andrew Grant, Sandra MacLean, Marianne Marchand, etc.
The editors also want to express their gratitude to Patrik Stålgren and
Rodrigo Tavares (both at Göteborg University) who have provided constructive
and invaluable comments on the entire manuscript. And last, but by no
means least, our thanks to Amanda Watkins at Palgrave Macmillan for being
supportive of this proposed reader. Needless to say, we could not have even
envisaged undertaking this challenge without solid institutional support in
Göteborg (Padrigu) and London (ICS) as well as continued domestic indulgence.

FREDRIK SÖDERBAUM
TIMOTHY M. SHAW
Notes on the Contributors

The editors

Fredrik Söderbaum is Post-doctoral Research Fellow at the Department of


Peace and Development Research (Padrigu) at Göteborg University and
Associate Research Fellow at the United Nations University/Comparative
Regional Integration Studies (UNU/CRIS). His main research interest is the
theory and comparative study of the new regionalism, with a special focus
on Africa. Recent books are Regionalization in a Globalizing World (co-editor
with Michael Schulz and Joakim Öjendal, 2001); The Political Economy of New
Regionalism in Southern Africa (Ph.D. dissertation, 2002); New Regionalism in
Africa (co-editor with Andrew Grant, 2003); and Regionalism and Uneven Devel-
opment in Southern Africa: The Case of the Maputo Development Corridor (co-editor
with Ian Taylor, 2003). Ongoing research projects include comparative micro-
regionalism and policy coordination between EU and the member states.
Timothy M. Shaw is Professor of Commonwealth Governance and Devel-
opment in the School of Advanced Study at the University of London where
he directs the Institute of Commonwealth Studies. He continues to be visiting
professor at Mbarara University in Uganda and Stellenbosch University in
South Africa, having previously been a visiting faculty member in Denmark,
Hungary, Japan, Nigeria, Zambia and Zimbabwe. He was Professor of Political
Science and International Development Studies at Dalhousie University in
Nova Scotia, Canada, for three decades, and has edited the Palgrave Macmillan
Series in International Political Economy for over fifteen years.

The contributors

Morten Bøås is a researcher at the Institute for Applied International Studies


(FAFO) in Oslo. He has published extensively on African politics, the multi-
lateral system, and regionalisms and regionalization. His most recent publica-
tions in English include New and Critical Security and Regionalisms (co-edited
with James J. Hentz, 2003) and Multilateral Institutions: A Critical Introduction
(co-authored with Desmond McNeill, 2003). His current research interest is
local–regional coping strategies in regional war zones.
Barry Buzan is Professor of International Relations at the London School of
Economics (LSE). From 1988 to 2002 he was Project Director at the Copen-
hagen Peace Research Institute (COPRI). From 1995 to 2002 he was Research
Professor of International Studies at the University of Westminster, and

ix
x Notes on the Contributors

before that Professor of International Studies at the University of Warwick.


He was elected a fellow of the British Academy in 1998. Among his recent
books are: Security: A New Framework for Analysis (1998, with Ole Wæver and
Jaap de Wilde); International Systems in World History: Remaking the Study of
International Relations (2000, with Richard Little); and Regions and Powers:
The Structure of International Security (2003, with Ole Wæver). His main
project during 2003 is a book titled International Society and World Society
which undertakes a major review and reconstruction of English school theory.

Richard Falk is Albert G. Milbank Professor Emeritus of International Law


and Practice, Princeton University, and Visiting Distinguished Professor of
Global Studies, University of California, Santa Barbara. His most recent
books are The Great Terror War (2003); Religion and Humane Global Governance
(2001); and Human Rights Horizons (2000). He currently serves as Chair of
the Board, Nuclear Age Peace Foundation.

Andrew Gamble is Professor of Politics and Co-Director of the Political Econ-


omy Research Centre (PERC) at the University of Sheffield. His main
research interests are political economy and political theory. He is joint edi-
tor of New Political Economy and The Political Quarterly. His books include The
Free Economy and the Strong State (1994); Hayek: The Iron Cage of Liberty
(1996); and Politics and Fate (2000).

Björn Hettne is Professor at the Department of Peace and Development


Research at Göteborg University (Padrigu). He has published extensively in
a range of different research fields, including development and world-
system theory, the relationship between peace and development, European
security and development, Indian development, the South Asian security
complex and the new regionalism. He has been research leader of several
international research projects on regionalism, most recently the UNU/
WIDER project on ‘The New Regionalism and the International System’, which
resulted in a five-volume mini-series published between 1999 and 2001.

Helge Hveem is Professor of International Politics at the Department of


Political Science and Director of the Centre on Technology, Innovation and
Culture at the University of Oslo. He was previously Research Director at the
Centre for Development and the Environment, University of Oslo (SUM).
He has published extensively in the field of international political economy,
comparative politics and international development studies. His current
projects include the changing of the international economic system, North–
South relations, ‘bargaining economy’ and industrial organization theory.
Bob Jessop is Professor of Sociology and Director of the Institute for
Advanced Studies in Management and Social Sciences at Lancaster University
(UK). He has written extensively on state theory, the regulation approach, radi-
cal political economy, welfare states, and social theory. His most recent books
Notes on the Contributors xi

are The Future of the Capitalist State (2002) and State/Space (co-edited with
Neil Brenner, Martin Jones and Gordon MacLeod, 2002). He is currently
working on two research projects. One concerns the contradictions of the
knowledge-based economy; the other addresses recent and continuing
changes in forms of state and governance. More details about past, present,
and future research can be found at his homepage: <http://www.comp.
lancs.ac.uk/sociology/rjessop.html>.

Marianne H. Marchand is Professor in International Relations at the


Universidad de las Américas, Puebla (Mexico), while holding a research
appointment at the University of Amsterdam. Her research agenda has been
driven by an overriding concern with the politics of change and (global)
restructuring. Her publications include Feminism/Postmodernism/Development
(with Jane Parpart; Routledge, 1995); Gender and Global Restructuring (with
Anne Sisson Runyan; Routledge, 2000); and Third World Quarterly, vol. 20,
no. 5, Special Issue: ‘New Regionalisms’ (with Morten Bøås and Timothy M.
Shaw, 1999). In addition, Marianne Marchand is also the co-editor of the
RIPE Series in Global Political Economy (Routledge) and of the Gender in a Global/
Local World Series (Ashgate Publishing).

Percy S. Mistry is Chairman of the Oxford International Group, which


owns and manages a series of in-house private equity funds. He is a non-
executive director on the Boards of several financial institutions, industrial
corporations, and public policy forums in the United Kingdom, India, Africa
and Hong Kong. He is an independent advisor to governments in Africa,
South Asia, East Asia and the Caribbean and to donor governments and
international institutions. He was CEO of Synergy Power Corporation (HK)
in 1998–9; Chairman of D.C. Gardner & Co. (UK) in 1992–3; and Senior
Fellow for International Finance at the University of Oxford (1987–92).
Prior to that he was a senior executive at the World Bank (Finance Complex,
1981–7) having worked at the Bank earlier on East Africa (1971–3), Asia
(1973–7) and in IFC (1977–8). Between 1978 and 1981 he was CEO of a
corporate finance firm (SHK-SGV) in Hong Kong.

Iver B. Neumann D. Phil. (Oxon) is Research Professor at the Norwegian


Institute of International Affairs, where he is writing the history of the Nor-
wegian Ministry of Foreign Affairs for its 2005 centenary. Selected books
include Regional Great Powers in International Politics (1992); Russia and the
Idea of Europe: A Study of Identity and International Relations (1996); Classical
Theories of International Relations (co-editor with Ian Clarke, 1996); The
Future of International Relations: Masters in the Making (co-editor with Ole
Wæver, 1997); and Uses of the Other. The ‘East’ in European Identity Formation
(1999).
xii Notes on the Contributors

Anthony Payne is Professor of Politics and Co-Director of the Political


Economy Research Centre (PERC) at the University of Sheffield in the United
Kingdom. He works on issues of development, regionalism and globalization,
and recently co-edited The New Political Economy of Globalisation (two volumes,
2000). He is presently writing a book provisionally entitled The Global Politics
of Unequal Development.
Diana Tussie holds a Ph.D. from the London School of Economics (LSE). At
present she is a senior research fellow in International Relations at FLACSO
Argentina (Latin American School of Social Sciences) and at CONICET
(National Council for Technical and Scientific Research). She directs the
Research Programme on International Economic Institutions as well as the
Latin American Trade Network (LATN). In 2000 she was a member of the
Board of Directions of the International Trade Commission in the Argentine
government; and in 2001 she was Undersecretary for International Trade
Policy. Recent publications include Trade Negotiations in Latin America: Problems
and Prospects (2002); The Environment and International Trade Negotiations:
Developing Country Stakes (2000); and Guest Editor of Global Governance, Special
Issue (vol. 6, no. 4, 2000).
List of Abbreviations

ACP Africa, Caribbean and Pacific


ACU Association of Commonwealth Universities
AfDB African Development Bank
AFTA American Free Trade Area
AGOA US Africa Growth and Opportunity Act
APEC Asia-Pacific Economic Cooperation
ARF ASEAN Regional Forum
ASEAN Association of Southeast Asian Nations
ASEM Asia-Europe Meeting
AU African Union
CAN Andean Community of Nations
CARICOM Caribbean Community and Common Market
CBI cross-border investment
CBR cross-border region
CEPAL UN Economic Commission for Latin America and the Caribbean
CET common external tariff
CIS Commonwealth of Independent States
CMEA Council for Mutual Economic Assistance (COMECON)
COMESA Common Market for Eastern and Southern Africa
CUFTA Canada–US Free Trade Agreement
CWC chemical weapons convention
DRC Democratic Republic of Congo
EAA European Aluminium Association
EAEC East Asia Economic Caucus
EC European Community
ECA UN Economic Commission for Africa
ECB European Central Bank
ECOMOG ECOWAS Cease-Fire Monitoring Group
ECOWAS Economic Community of West African States
ECSC European Coal and Steel Community
EFTA European Free Trade Association
EMU Economic and Monetary Union
EPZ export processing zone
ESCAP UN Economic and Social Commission for Asia and the Pacific
ESCWA UN Economic and Social Commission for Western Asia
EU European Union
FDI foreign direct investment
FSU former Soviet Union

xiii
xiv List of Abbreviations

FTA free trade area


FTAA Free Trade Area of the Americas
GATT General Agreement on Tariffs and Trade
GCC Gulf Cooperation Council
IADB Inter-American Development Bank
ICGG International Commission on Global Governance
IFI international financial institution
IFG International Forum on Globalization
IGAD Intergovernmental Authority on Development
IGO intergovernmental organization
IMF International Monetary Fund
IPE international political economy
IR international relations
KBE Knowledge-based economy
LAFTA Latin American Free Trade Agreement
LAIA Latin American Integration Association
LATN Latin American Trade Network
LIEO liberal international economic order
MDC Maputo Development Corridor
Mercosur Southern Common Market/Comisión Sectorial para el Mercado
Común del Sur
MNE multinational enterprise
MTCR missile technology control regime
NAFTA North American Free Trade Agreement
NATO North Atlantic Treaty Organization
NEPAD New Partnership for Africa’s Development
NET natural economic territories
NGO non-governmental organization
NPT non-proliferation treaty
NRA new regionalism approach
NRT new regionalism theory
NTB non-tariff barrier
OAS Organization of American States
OAU Organization of African Unity
OECD Organization for Economic Cooperation and Development
OECS Organization of Eastern Caribbean States
OPEC Organization of Petroleum Exporting Countries
PADRIGU Department of Peace and Development Research, Göteborg
University
PERC Political Economy Research Centre, University of Sheffield
PRC People’s Republic of China
RIA regional integration arrangement
RSC regional security complex
SAARC South Asian Association for Regional Cooperation
List of Abbreviations xv

SACU Southern African Customs Union


SADC Southern African Development Community
SADCC Southern African Development Coordination Conference
SAPSN Southern Africa Peoples’ Solidarity Network
SIJORI Singapore–Johor–Riau (Growth Triangle)
TNC transnational corporation
TRIMS trade-related investment measures
TRIPS trade-related intellectual property rights
UN United Nations
UNDP United Nations Development Programme
UNU/CRIS United Nations University/Comparative Regional Integration
Studies
UNU/WIDER United Nations University/World Institute for Development
Economics Research
UNECE UN Economic Commission for Europe
WAEMU West African Economic and Monetary Union (Union Economique
et Monétaire Ouest Africaine, UEMOA)
WOA world order approach
WOMP World Order Models Project
WTO World Trade Organization
1
Introduction: Theories of New
Regionalism
Fredrik Söderbaum

The raison d’être for another collection on new regionalism

The resurrection and redefinition of regionalism are among the dominating


trends in today’s international studies. Regionalism has been brought back
in to the academic as well as the policy debates after some decades of
neglect. Notwithstanding the hegemony of globalization and resultant
anti-globalization, regionalism constitutes a set of middle-level adjuncts or
alternatives in policy and practice as well as analysis. This is especially so in
the post-bipolar world of the 1990s, now reinforced by the challenges to
both assumptions and action constituted by the September 11 syndrome.
New regionalism – a range of formal/informal mid-level ‘triangular’ relations
among not only states but also non-state actors, notably civil societies and
private companies – is a central aspect of the ‘new’ inter- or transnational
relations.
Since the late 1980s we are witnessing an explosion of various forms of
regionalisms and regionalist projects more or less all over the world. The
widening and deepening of the European Union (EU) is perhaps the most
debated example of this trend. Other regionalization processes can be
observed in other parts of the world as well, made visible through the
(re)emergence, revitalization or expansion of regional projects and organiza-
tions, such as the Southern Common Market/Comisión Sectorial para el
Mercado Común del Sur (Mercosur), the Association of Southeast Asian
Nations (ASEAN), the North American Free Trade Agreement (NAFTA), the
Southern African Development Community (SADC), the Economic Com-
munity of West African States (ECOWAS) and so forth.
It is important to recognize that this renewed and worldwide trend of
regionalism, often labelled ‘the new regionalism’, is not confined simply to
formal inter-state regional organizations and institutions. On the contrary,
the new regionalism is characterized by its multidimensionality, complexity,
fluidity and non-conformity, and by the fact that it involves a variety of
state and non-state actors, who often come together in rather informal

1
2 Introduction: Theories of New Regionalism

multi-actor coalitions. It is therefore now appropriate to speak of regionalisms


in the plural rather than the singular. This plurality is true in terms of both
the variety of regionalization processes and the ‘new’ theoretical
approaches.
However, in spite of a proliferation of research and interest in various
forms of regionalism, there is surprisingly little theoretical debate in this
burgeoning field. Most research in the field is carried out on the basis of
single cases or with a limited set of (comparative) cases. Often the purpose is
descriptive or to provide historical and empirical rather than conceptual
and theoretical insights. To the extent that current research seeks to generate
and create new or revise old assumptions or explanations, this is often done
in order to consolidate a particular theory or a limited set of theoretical
approaches. What is missing in the study of regionalism is an attempt to
bring together a variety of theories of new regionalism. In essence, in spite
of being one of the dominating trends and fields in current international or
global studies, to date there is no comprehensive theory-book for new
regionalism.
This book constitutes the first systematic attempt to bring together leading
theories of new regionalism. Major theorists in the field from around the
world – Barry Buzan, Morten Bøås, Richard Falk, Andrew Gamble, Björn
Hettne, Helge Hveem, Bob Jessop, Marianne Marchand, Percy Mistry, Iver
Neumann, Anthony Payne, Timothy Shaw and Diana Tussie – develop their
own distinctive theoretical perspectives, spanning new regionalism and
world order approaches along with regional governance, liberal institutionalism
and neoclassical development regionalism, to regional security complex
theory and the region-building approach. They have all been associated
over the years with a variety of disciplines, institutions, schools and debates
and so bring a rich set of insights and connections to this pioneering
project.
It should be said from the outset that the emphasis on theory by no
means implies a neglect of the empirical worlds of regionalism. Theory can
be a very practical tool. It enables us to make sense of the world. In fact, it is
hardly possible to think systematically and scientifically about international
relations and the new regionalism without theory. When we understand
and build theories of new regionalism, we will automatically be able to
understand more about the phenomenon of new regionalism itself. In fact,
to most researchers (at least the theorists), these are two sides of the same
coin.
One main purpose in proposing and assembling this collection is to reveal
the pluralism and richness of theories of new regionalism. These tend to
have divergent meta-theoretical and conceptual points of departure, different
ways of producing knowledge and building theory as well as a concern with
diverse research questions. Since one single theory cannot give a sufficient
picture of the multiplicity of new regionalism, we necessarily have to recognize
Fredrik Söderbaum 3

and embrace a variety of theories. This is what makes the theoretical world
of new regionalism so rich. The expectation is that this book will help to
clarify differences as well as similarities between theories and approaches.
Another related purpose for this unique theoretical exercise is to over-
come, or at least minimize, the fragmentation and division in the field of
new regionalism. Too often theorists speak past each other, without really
engaging with alternative theories and competing research results. In
response, this volume aims also to contribute to a more productive debate
between different theoretical standpoints, not least between mainstream
and critical/non-orthodox theories. By facilitating theoretical interaction
and comparison, the ambition is to move towards a common ground,
which in turn can help in bringing the debate forward.
The volume contains a wide spectrum of partly overlapping and partly
competing perspectives and theories of new regionalism. The purpose of
this introductory chapter is to situate the theories in the broader theoretical
landscape and also clarify some important similarities and differences
between them. In so doing the next two sections concentrate on what is
‘new’ and what is ‘regional’ in the new regionalism, respectively. The third
section considers the richness of theories of new regionalism, first and fore-
most in terms of the variety of types of theory and the research focuses that
exist. Finally, the structure of the rest of the book is outlined.

What is new in the new regionalism?

The term ‘new regionalism’ is now widely used in the debate. In order to
understand more about what is ‘new’ in this new regionalism, one can
differentiate between a variety of partly overlapping and partly competing
distinctions and meanings. To begin, many scholars and policy-makers refer
to the new regionalism as the current wave or era of regionalism (i.e. new in a
temporal sense). However, cross-national/community interaction and inter-
dependencies have existed far back in history (Mattli, 1999). Bøås, Marchand
and Shaw (Chapter 11) argue that a ‘regionalized world is therefore not a
novelty, but an integrated part of human history’.
It is thus evident that often old regionalism and new regionalism are
distinguished by referring to waves or generations of regionalism. Some theorists
refer to the protectionist trend of the 1930s as the first main wave of region-
alism. More frequently, however, it is argued that (voluntary and compre-
hensive) regionalism is predominantly a post-Second World War phenomenon.
We may therefore speak of several generations and varieties of post-Second
World War regionalism (Mistry, Chapter 7; cf. Hveem, 2000a). According to
Hettne (and many others) there have been two main waves of regionalism,
which are often referred to as the old and the new regionalism (Hettne,
Chapter 2). The first wave had its roots in the devastating experience of
inter-war nationalism and the Second World War. It emerged in Western
4 Introduction: Theories of New Regionalism

Europe in the late 1940s and, although exported to several other regions in
the South, it died out in the late 1960s and early 1970s. The second wave
began to emerge in the mid-1980s, again starting in Western Europe (with
the White Paper and the Single European Act) and gradually turning into a
more widespread phenomenon.
There are both continuities and similarities between old and new region-
alism, so that when studying contemporary regionalism one can easily get a
feeling of déjà vu. For instance, many regional projects and regional organ-
izations were initiated during the era of old regionalism and then simply
renewed or re-inaugurated (sometimes with a new name and sometimes
with a few different members) in the 1980s and 1990s. Under such circum-
stances it is often difficult to separate the historical from the contemporary.
In response to this, Hettne (1999: 8) argues that, rather than identifying a
new era or new wave of regionalism, ‘I find the identification of new
patterns of regionalization (co-existing with older forms) more relevant’, i.e.
new regionalism in the empirical rather than the temporal sense.
This is closely related to the fact that we may also speak of new regionalism
in a spatial sense, referring to a region, a real emerging region, that did not
previously experience genuine regionalization or in which it was imposed
from outside, more or less as a simple copy of the European integration
model. As pointed out by Mittelman (2000: 113), ‘[t]he most important
features of the new regionalism are its worldwide reach, extending to more
regions, with greater external linkages’. Furthermore, compared to the old
regionalism in the 1960s today’s regionalism is not only emerging more or
less all over the world, but it is often taking different shapes in different
parts of the world. Whereas the old regionalism was generally specific with
regard to objectives and content, and (often) had a narrow focus on prefer-
ential trade arrangements and security alliances, the number, scope, and
diversity of the new regionalism has grown significantly during the last
decade (Hettne, Chapter 2; Schulz et al., 2001). In short, the new regionalism
is both global and pluralistic, compared to the old regionalism, which was
Eurocentric and narrow.
Furthermore, many new regionalism theories may perhaps be considered
to be new also in that they highlight the close relationship between region-
alism and the extra-regional environment, particularly globalization. In many
ways this constitutes a break with the old regionalism theories, especially
with the leading variant of neofunctionalism, which often tended to ignore
the global environment, almost as if regions were insulated from the external
world. In this regard, most observers in the field emphasize the fundamental
difference between the old bipolar Cold War context of the old regionalism
and the current context after the Cold War, in which the new regionalism is
being played out. Having said so, however, there are many different inter-
pretations regarding what constitutes the new context and particularly the
implications for regionalism.
Fredrik Söderbaum 5

Regardless of how the global order is interpreted – i.e. whether we are


supposed to live in a uni-, tri- or multi-polar world – there is a rather strong
consensus in the field that the new regionalism is extroverted rather than
introverted. This is also in contrast to many theories as well as policies during
the old regionalism. In fact, the multifold relationships between globalization
and regionalization are central to the understanding of the contours of the
emerging world order. Undoubtedly and as this volume will show, there are
a variety of perceptions and opinions of how globalization and regionalization
relate to each other. Much of the debate in the early and mid-1990s tended
to bring the old regionalism issue to the discussion table; namely whether
regionalization was a stumbling-block or stepping-stone towards globalization
and improved multilateralism. However, more or less all theorists in this
volume have moved beyond such linearity and one-dimensional dilemmas,
and often draw our attention to the multifaceted relationship between
globalization and regionalization.
Finally and perhaps most important, the term ‘new regionalism’ is also
relevant for theoretical reasons. It is a widely used theory-building strategy
to add the prefix ‘new’ in order to distinguish theoretical novelties from
previous frameworks: e.g. new conservatism, new political economy, new
political science, new security, and so forth. ‘New regionalism’ is increasingly
employed by a wide range of scholars adhering to many different theoretical
traditions and perspectives. Although this has created some confusion, it is
best understood as an indication of the richness of new regionalism theory;
something which this volume seeks to capture.
It should be recognized that some theorists draw attention to the same or
similar driving forces, motives and effects of regionalism as during the old
regionalism some three decades ago (or before). Therefore many (main-
stream) scholars do not use the term ‘new regionalism’ at all, or only to a
limited extent. When it is used, then newness may first and foremost repre-
sent an adjustment to a different world order context, dominated by post-
Cold War processes and globalization. This tends to make the term ‘new
regionalism’ somewhat less useful (at least from a theoretical perspective).
Other scholars, such as Diana Tussie (Chapter 6), may emphasize the new
global context but also make some theoretical adjustments, but within their
paradigm, so to speak. Although Tussie does not make a clean break with
her ‘previous’ association with liberal institutionalism, it can be argued that
she develops it. By the same token, while, on the one hand, Percy Mistry
(Chapter 7) challenges conventional regional economic integration theory,
especially the static comparative framework, on the other hand he mainly
seems to improve rather than do away with neoclassical economics. These
cautious revisions, informed by the discipline of economics, can be
contrasted with the more critical and heterodox theorists, who have few, if
any, links to old regionalism theories and frameworks. Most of them do not
even engage in a debate with the old regionalism theories. This explains
6 Introduction: Theories of New Regionalism

why the term ‘new regionalism’ is used most consistently by scholars associated
with a rather loose body of thinking, broadly referred to as new or critical
international political economy (IPE). Robert Cox (1996) is often referred to
as one of the ‘founding fathers’ of this loose school of thought, although it
was Craig Murphy and Roger Tooze (1991) who first advanced the call for a
new IPE, which has also been referred to as heterodox or counterhegemonic IPE
(see Hettne, 1995a and b; Gamble et al., 1996; Hoogvelt, 1997; Neufeld,
1997; Mittelman, 2000).

What is regional in the new regionalism?

The generic ‘region’ has occupied an important position in the geographical


and social sciences. Historically it has been defined first and foremost as a
space between the national and the local (municipality), primarily within
particular states. These types of regions are here referred to as micro-regions,
and they can exist within a particular state or be cross-border in nature. The
concept of region can also refer to macro-regions (world regions), which are
larger territorial (in contrast to non-territorial) units or sub-systems,
between the state and the global system level. Finally, between the two
levels there are meso-regions: mid-range state or non-state arrangements and
processes.
In international studies, the macro-region has been the most common
level or object of analysis. This is mainly explained by the fact that micro-
regions have often been seen as part of the study of domestic and comparative
politics and economics. In current international affairs, with its fuzzy
borderline between the domestic and the international, micro-regions have
increasingly become cross-border in nature ( Jessop, Chapter 10). In this
way, micro-regions have become intimately connected with globalization as
well as other levels of regionalization. Several of the theories in this volume
bridge the gap between the two separated discourses of macro-regionalism
and micro-regionalism (Hettne, Chapter 2; Jessop, Chapter 10; also
cf. Perkmann and Sum, 2002; Söderbaum, 2002; Grant and Söderbaum,
2003; Söderbaum and Taylor, 2003). In order to avoid confusion, however,
henceforth in this collection the concept of region refers to macro-regions
whereas micro- or meso-regions (sub-regions) will be referred to as such.
The concept of region stems from the Latin word ‘regio’, which means
direction (Jönsson et al., 2000: 15). It is also derived from the Latin verb
‘regere’: ‘to rule’ or ‘to command’. Subsequently, region denoted border or a
delimited space, often a province. Many disciplines and discourses have
maintained a strong emphasis on ‘territory’ and ‘rule’ in the study and
definition of regions. This has resulted in a considerable degree of research
capacity being devoted to determining what types of regions are the most
functional, instrumental and efficient (to rule). Often, especially in political
science and economics, regions have been taken as pre-given, defined in
Fredrik Söderbaum 7

advance of research, and simply been seen as particular inter-state frameworks


and intergovernmental regional organizations, or what Mistry (Chapter 7)
refers to as Regional Integration Arrangements (RIAs) (cf. Tussie, Chapter 6).
Barry Buzan (Chapter 8) constitutes, however, a prolific example of a
scholar who has tried (step-by-step) to transcend conventional definitions
of regions. Buzan’s classical definition of a ‘regional security complex’ was ‘a
set of states whose major security perceptions and concerns are so inter-
linked that their national security problems cannot reasonably be analyzed
or resolved apart from one another’. The updated definition of a regional
security complex is now: ‘a set of units whose major processes of securitization,
desecuritization, or both, are so interlinked that their security problems
cannot reasonably be analyzed or resolved apart from one another’. The
revised theory is a reflection of Buzan’s attempt to move beyond state-centric
assumptions and also take into account the constructivist method. The units
can be states, but also other units can be predominant, and security
complexes are not givens but constructed in the process of securitization.
Other new regionalism theorists, who are more firmly based in the
constructivist, critical and post-structuralist camp, further emphasize that
regions must not be taken for granted; that they are not ‘natural’, objective,
essential or simply material objects. In Hettne’s (Chapter 2) view, regions
are processes; they are in the making (or un-making); their boundaries are
shifting – ‘in the constructivist approach regions come to life as we talk and
think about them’. According to Jessop (Chapter 10), ‘rather than seek an
elusive objective . . . criterion for defining a region, one should treat regions
as emergent, socially constituted phenomena’. Neumann (Chapter 9) goes
on to ask whose region is actually being constructed. In so doing he identifies
a blank spot in much of (mainstream) regionalism research. All theories
make assumptions about what a region is, but according to Neumann the
mainstream theories tend to neglect the ‘politics of defining and redefining
the region’. The point, Neumann claims, is that ‘this is an inherently political
act, and it must therefore be reflectively acknowledged and undertaken as
such’.
Just as there are different understandings of what is a region, there are
also many contrasting and not always compatible definitions and conceptu-
alizations of regionalism and regionalization. As a consequence, it is not
possible to come up with definitions that all theorists subscribe to. Suffice it
to underline the crucial distinction between regionalism and regionalization.
Most theorists in this volume (but not all) define regionalism as the ideas,
identities and ideologies related to a regional project, whereas regionalization
is most often defined as the process of regional interaction creating a
regional space (or the outcome). However, for instance, Gamble and Payne
(Chapter 3) define regionalism as a states-led project, whereas regionalization
is seen mainly as a societal and a non-state process. This is a slightly different
view from that of scholars such as Bøås, Marchand and Shaw (Chapter 11),
8 Introduction: Theories of New Regionalism

who argue that ‘regionalism is clearly a political project, but it is obviously


not necessarily state-led, as states are not the only political actor
around . . . we clearly believe that, within each regional project (official or
not), several competing regionalizing actors with different regional visions
and ideas coexist’.
Finally, it should be said that sometimes there is a belief or assertion that
regional integration is fundamentally different from regional cooperation.1 For
instance, Christiansen (2001) argues that regional integration is happening
in Europe, whereas regional (economic) cooperation is the category that
best captures the regional phenomenon in the rest of the world. But, as
Hettne (Chapter 2) points out, ‘regional integration belongs to the discourse
of the old regionalism’. Through their usage of regionalism/regionalization
the scholars in this volume move beyond the narrow and somewhat artificial
distinction between regional cooperation and regional integration. In so
doing they are able to better account for the complexity and multidimen-
sionality of current regionalism, involving cooperation and integration
among a variety of actors and supported by a diversity of institutional
frameworks in both formal and informal settings. Needless to say, the
concepts of regional integration and regional cooperation can still be kept
analytically distinct and under certain conditions they can provide powerful
insights. However, there are many instances where they hide more than
they reveal. In addition, often they need to be supplemented by ‘regional
systems’, ‘regional agreements’ and above all the more general categories of
‘regionalism’ and ‘regionalization’. Through this usage it is possible to
bridge the existing divide between students of European integration and
those of new and comparative regionalism.

The richness of new regionalism theory

The term ‘theory’ has many different meanings. It must be clear from the out-
set that the theorists in this volume do not always adhere to the same under-
standing of what constitutes ‘good theory’. There is no need, at least not in this
book, for a misplaced universalistic definition of what formulation and defin-
ition of theory is to be preferred. On the contrary, this collection highlights the
richness of new regionalism theory. Different theorists are engaged in different
kinds of knowledge production and they also focus on different research ques-
tions – what below is discussed under the sections types of theories and types of
research focus respectively. Before moving on, it needs mentioning that some-
times theorists are concerned with similar research questions but differ in
terms of knowledge production, while at other times it may be vice versa.

Types of theories
It must be underlined that the dividing line between an ‘approach’ and a
‘theory’ is by no means crystal-clear. Many orthodox ‘scientists’ would
Fredrik Söderbaum 9

probably not consider several of the frameworks elaborated in this volume


to be ‘theories’, because they do not always stipulate a causal relation
between independent and dependent variables. However, the independent/
dependent causality is only one particular way to build theories. Equally
important, several authors do not even consider their own frameworks to be
theories. Instead they use the more open-ended label of ‘approach’,
‘perspective’ (Falk, Chapter 4) or ‘pragmatic empiricism’ (Mistry, Chapter 7).
Of course, one has to be clear about what type of theory (approach or
perspective) one seeks to construct. Some theories are strictly causal and
‘objective’, in which ‘facts’ and ‘theories’ are separated, while others are
based on different meta-theoretical foundations, thus being normative,
constitutive, critical, post-structural or post-modern and so forth. There is
no space (or need) to go into detail about all the individual theories in this
volume. It suffices to distinguish between some broad categories, which will
be helpful in grouping the different theories.2
One distinction, which has become widely used during the last decade, is
that between ‘rationalist’ and ‘reflectivist’ approaches to international relations
theory, with (mainstream) social constructivism occupying the ‘middle ground’
(Smith, 2001; cf. Adler, 1997). According to Smith (2001), rationalist theories
refer to neorealism and neoliberalism, whereas the reflectivist position refers to
a diverse group of theories, such as critical theory, historical sociology, post-
structuralism, post-modernism, feminism and normative theory. Rationalist
theories are based on rational choice and take the interests, ideas and identities
of actors (which are seen as self-interested egos) as given, while reflectivists (as
well as constructivists) focus on how inter-subjective practices between actors
result in how interests, ideas and identities are formed in the process of social
interaction (rather than prior to such interaction) (see more below).
A somewhat similar but yet different categorization is the distinction
made by Cox (1995, 1996) between ‘problem-solving’ and ‘critical’ theory.
The former takes the world as given (and on the whole as good) and
provides guidance to correct dysfunctions or specific problems that arise
within this existing order, whereas the latter is concerned with how the
existing order came into being and the construction of strategies for structural
and social change. Often critical theorists refer to Cox’s by-now classic statement:

Theory is always for someone and for some purpose. All theories have a
perspective. Perspectives derive from a position in time and space. The
world is seen from a standpoint definable in terms of nation or social
class, of dominance or subordination, of rising or declining power, of a
sense of immobility or of present crisis, of past experience, and of hopes
and expectations for the future. (Cox, 1986: 207)

To a large extent, there is an overlap between rationalist and problem-


solving theories on the one hand, and the reflectivist and critical theories
10 Introduction: Theories of New Regionalism

on the other. However, the dividing line between rationalism/problem-solving


and reflectivism/critical theories (or whatever categorization one may use) is
by no means sharp. Still, these very broad categories provide some guidance
as to where the individual theories/approaches in this volume ‘belong’.
Clearly, the study of regionalism is dominated by various rationalist/problem-
solving theories. Conventionally, the neorealists put heavy emphasis on
national interests, security and power politics for the emergence of regions,
whereas neoliberal institutionalists stress the role of institutions and
regional organizations for managing interdependencies and achieving
collective goods on a regional basis. In the study of regionalism since the
1990s, the various rationalist and problem-solving approaches have moved
closer together. Not only do they often share a common epistemology and
agree on some core assumptions – such as the anarchical system and the
dominance of states as self-seeking egoists – they often focus on the variance
of the institutionalization of regionalism and other rather specific issues,
especially trade (Mansfield and Milner, 1997; Moravcsik, 1998; cf. Fawcett
and Hurrell, 1995). One of the main differences is that neorealists emphasize
structural and power-oriented variables, while neoliberal institutionalists
give more weight to the regulating influence of regional institutions (inter-
governmental regional organizations in particular).
Since the mid-1990s a series of reflectivist/critical approaches to regionalism
have developed, to a large extent as a direct result of the strengthening of
this type of scholarship more broadly (including constructivism). These
approaches challenge core rationalist/problem-solving features, such as the
separation of subject and object, fact and value, state-centric ontology and
rationalist epistemology. Needless to say, there are a large number of different
critical/reflectivist theories of new regionalism, which are somewhat difficult
to lump together.3 At least to some extent their common denominator is
their dissatisfaction with mainstream and rationalist theories. As Neumann
(Chapter 9) points out with regard to his own region-building approach,
‘instead of adopting the accepting attitude inherent in many
[mainstream] . . . approaches, it insists on an un-accepting, irreverent and
therefore invariance-breaking attitude’.
Another important distinction, already touched upon above, relates to
how different theories look upon the way interests, ideas and identities are
formed. This follows, first and foremost, the rationalist versus reflectivist
categories. The rationalist schools of thought ‘share a view of the world of
international relations in utilitarian terms: an atomistic universe of self-
regarding units whose identity is assumed given and fixed, and who are
responsive largely if not solely to material interests that are stipulated by
assumption’ (Ruggie, 1998: 3). ‘They assume interests exist rather than
explain how interests occur’ (Higgott, 1998a: 50). As Hveem (Chapter 5)
points out, the rationalist and so-called neo-utilitarian assumptions can
certainly be both relevant and useful. For instance, corporate regionalization
Fredrik Söderbaum 11

is normally motivated by the maximization of utility, such as economic


growth or increasing rents. The utility-maximization motive may also cover
non-economic goals. Mistry (Chapter 7) makes a powerful argument in
favour of utility-driven and problem-solving regionalism, with regard to
both state and market actors. He shows how the new regionalism can be an
effective risk-management strategy or occur because multilateralism does
not work. In many ways, this is in line with Tussie’s argument (Chapter 6)
that regionalism is a risk-minimization strategy and thrives in the policy
spaces left by multilateralism, thereby providing a substance to multilateralism.
Reflectivists and constructivists challenge strict rationalist (mainly materialist
and utility-based) assumptions, and they do not take interests, ideas and
identities as given. As Neumann (Chapter 9) points out, ‘instead of postulating
a given set of interests that actors are supposed to harbour before their social
interaction with other collectives, the region-building approach investigates
interests where they are formulated’ (which in Neumann’s case means in
‘discourse’). This is related to the fact that reflectivists postulate that actors’
interests and choices are developed according to a different rationality, with
a broader set of variables than assumed by the logic of ‘rational choice’ and
‘economic man’. From this perspective, agency is often motivated and
explained by ideas, identity, accumulation of knowledge and learning rather
than by traditional routines, structural factors or established institutions.
The architects of the world order approach (WOA), Andrew Gamble and
Anthony Payne (Chapter 3), underline the need to go beyond materialist
definitions of power and insert ideas into the standard framework, which in
their view makes their framework substantially more nuanced than main-
stream and rationalist approaches. In Chapter 11, Bøås, Marchand and
Shaw argue that the understanding of agency must go beyond preconceived
ideas based upon homo economicus – rational economic man. Rather, the
activities of the agents need to be placed in a social context. Hettne
(Chapter 2) challenges economic man from a different perspective. Following
Karl Polanyi, Hettne insists on the ‘natural’ (moral man) to regain power
over the ‘unnatural’ (economic man).
Finally, although many authors in this volume deal (explicitly or implicitly)
with the structure–agency problem, it is still possible to differentiate between
those who are leaning towards structural and macro-oriented explanations
and those who are more agency- and micro-oriented. Some scholars are
particularly concerned with historical structures and the construction of
world orders, while other analysts are more interested in the particularities
of agencies and lived social spaces. There is no need to be dogmatic about
what position and balance between structure and agency (or macro versus
micro) to prefer; or exactly how to balance structure–agency, because to a
large extent it is closely related to differences in meta-theoretical position as
well as the research focus. It is, for instance, difficult to provide a coherent
and graspable analysis of long-term structural transformation processes
12 Introduction: Theories of New Regionalism

focusing mainly on a multiplicity of lived agencies and micro-processes. On


the other hand, sometimes structural analyses have difficulty providing
detailed insights/explanations of the specificities and details of agents and
events on the ground. Here it is important to recognize that, as Neumann
points out, different assumptions may be chosen to illuminate different
aspects of regional politics, and different perspectives and their concomitant
narratives often tend to be complementary rather than mutually exclusive.
In a fascinating section in his chapter, Neumann illustrates this by using
two different sets of theoretical assumptions in the construction of two
widely differing narratives of the Northern European region. In a rather
similar manner, and in an attempt to move beyond the new regionalism
approach (NRA), Hettne (Chapter 2) seeks to understand regionalism ‘both
from an endogenous perspective, according to which regionalization is shaped
from within the region by a large number of different actors, and an exogenous
perspective, according to which regionalization and globalization are inter-
twined articulations, contradictory as well as complementary, of global
transformation’.
Several theorists in this volume employ a post-structural perspective and/
or agency- and micro-oriented perspectives. Hveem (Chapter 5), for
instance, claims ‘that the new regionalism is determined more by agency
and less by structure’. Bøås, Marchand and Shaw (Chapter 11) deliberately
employ an actor-oriented approach to the study of regions, which focuses
on entrepreneurial action. In their view, ‘to study entrepreneurial action is
to make microscopic readings of how the regional order ticks’. From this
perspective it becomes important to try to understand how actors perceive
their reality and how they seek to deal with it. The three co-authors propose
that ‘such a research strategy may enable us to incorporate into our analysis
a whole range of dimensions and practices which hitherto have been
considered outside the domain of political and economic research and the
study of regionalization’.

Types of research focus


The relationship between globalization/multilateralism and regionalization
constitutes one of the main research concerns in the field, for rationalists
and reflectivists alike. As indicated above, this contrasts with many old
regionalism theories, which were heavily concerned with the endogenous
forces of regional integration. Many theorists in this volume, especially but
not only the reflectivist/critical ones, emphasize the diversity of relationships
between globalization and regionalization. Hveem (Chapter 5) draws attention
to the multifaceted relations between them, arguing that a regional project
can ride on, reinforce, reject, hinder or hedge globalization. Jessop (Chapter 10)
highlights a large number of micro-regional and rescaling activities that lead
to new cross-border micro-regions – all of which are closely related and occur-
ring within contexts of both globalization and macro/meso-regionalization.
Fredrik Söderbaum 13

Bøås, Marchand and Shaw (Chapter 11) argue that we are dealing with
different layers and overlapping processes and nexuses of globalization and
regionalization simultaneously – what they refer to as the weave-world.
A series of other interesting comparisons can be made between different
theorists. The normative understanding of the relationships between globalization/
multilateralism and regionalization is particularly interesting. Gamble and
Payne (Chapter 3) are very clear that much of today’s regionalism is
open regionalism, and as such it tends to reinforce the detrimental effects of
economic globalization and global capitalism. Gamble and Payne believe
that there is a long way to go before new regionalism contributes to social
regulation and social control. Similarly, Hettne (Chapter 2) sees (economic)
globalization as a strong and in some of its dimensions irreversible force,
with deep implications for regionalism. Both these approaches consider
economic globalization as a highly uneven process and both seek to reveal
power relations behind this grand process. However, Gamble and Payne
(Chapter 3) consider today’s regionalism primarily as a manifestation of eco-
nomic globalization and prevailing forms of hegemony (i.e. as neoliberal/
open regionalism), whereas Hettne is more enthusiastic about the regional
phenomenon. Hettne applies the thinking of Karl Polanyi (1944) in order to
understand the emergence of the new regionalism in the current world
order context dominated by economic globalization. Following Polanyi,
Hettne argues that the dialectics of market expansion and attempts at political
intervention in defence of civil society constitute the basic forces of societal
change. Seen from this perspective the new regionalism represents the
‘return of the political’: that is, interventions in favour of crucial values,
among which development, security and peace, and ecological sustainability
are the most fundamental.
There are several theorists in this volume who draw attention to the (real
and potential) positive impact of regionalism. Just like the previous pair of
approaches, Richard Falk (Chapter 4) anticipates that regionalism can be
negative and that it is often synchronized with open regionalism (meaning
that ‘negative regionalism’ can reinforce ‘negative globalism’). Similarly to
Hettne but in contrast to much of what Gamble and Payne argue, however,
Falk believes that ‘positive regionalism’ can be an instrument against ‘negative
globalism’. Likewise, in general, liberal theorists tend to be rather optimistic
concerning the ‘positive’ potential of new regionalism. Mistry (Chapter 7)
argues that, in contrast to conventional economic integration theory, the
new regionalism is not a second-best but actually a first-best solution in
response to dysfunctional multilateralism and globalism. Tussie (Chapter 6)
also emphasizes that regional projects can give market access, which at least
the South wished for but was never able to get through multilateralism.
Finally, one of Hveem’s (Chapter 5) main points is that regional governance
has comparative political advantages compared to multilateral and global
governance.
14 Introduction: Theories of New Regionalism

One important difference in research focus between various theories in


this volume is what each of them identify as the principal unit of analysis,
and who the regionalizing actors or region-builders are. As already mentioned,
historically the study of regionalism has been very state-centric. At least to
some extent this is for good reason. Most states in the world have been or
are part of, or are joining, several regionalist projects. They do so for a rich
variety of reasons, which means that state-driven regionalism continues to
deserve and demand a great deal of research attention. There is no doubt
about the fact that we need to know more about how and why states are
creating regionalism and the dynamics of intergovernmental institutions,
which certainly makes it both legitimate and relevant still to focus on states
as actors in the process of regionalization. Some theories/approaches (Gamble
and Payne, Chapter 3; Tussie, Chapter 6; Mistry, Chapter 7; Neumann,
Chapter 9) are first and foremost geared towards the analysis of states and
inter-state frameworks, although these authors certainly differ about the
incentives behind regionalism/regionalization.
Many new regionalism theories seek, however, to go beyond a focus on states
as the main regionalizing actors. Hettne (Chapter 2) is very clear on the differ-
ence between old and new regionalism in this regard: ‘[w]hereas the old
[regionalism] was concerned with relations between a group of neighbouring
nation-states, the new [regionalism] formed part of a global structural trans-
formation, or globalization, in which also a variety of non-state actors were
operating at several levels of the global system.’ The implication for Hettne is
that the focus on the multitude of actors points beyond a state-centric
approach. Here it should be mentioned that the anticipated need to go
beyond a state-centric approach is intimately related to the understanding of the
state and its role in world politics. In contrast to those theorists who empha-
size state-led regional projects, for instance Gamble and Payne (Chapter 3),
Hettne points to the weakened capacity of the state and the consequent
unlikelihood of a conventional redistributional solution at the national level
and within particular state–society complexes. As already mentioned, Hettne
extends Polanyian ideas about the (potential) political role of civil society as a
means for the weak and the poor to protect themselves (cf. Mittelman, 2000).
Without doubt, it is contested whether this is really happening or not.
In accordance with several other theorists in this volume, Hveem (Chapter 5)
draws attention to transnational regionalization, which falls into two sub-
categories: corporate and societal regionalization. Similarly, according to
Bøås, Marchand and Shaw (Chapter 11), ‘[t]he state is most often one of the
regionalizing actors, but equally important actors can be identified within
the two other realms of the state–society–economy triangle: NGOs, new
social movements, media, companies as well as a range of actors based in
the second economy of the informal sector’. In their view, this is part of the
reason why new regionalism is such a pluralistic phenomenon, in terms of
differences in practice, theory as well as identity of regionalizing actors.
Fredrik Söderbaum 15

The emphasis on a pluralism of state and non-state actors is closely


related to the distinction between formal and informal (real) dimensions of
new regionalism. Some theorists are heavily geared towards the formal (and
even formalistic) dimension of new regionalism, while others give more
attention to informal aspects. Some analysts consider both aspects. For
instance, Hettne (Chapter 2) makes a distinction between the formal and
the real region. The former (de jure) is the formally organized region, defined
most easily by the membership of the dominant formal regional organiza-
tions and inter-state frameworks. In order to assess the relevance, the
substance and future potential of the formal region, it should be related to
the latter (de facto) region, which has to be defined in terms of more informal
and less visible and less precise criteria. When the formal and the real region
converge, the result is increasing levels of ‘regionness’ (cf. Hettne, 1999;
Hettne and Söderbaum, 2000).
Both the formal and informal are considered by Bøås, Marchand and
Shaw (Chapter 11). However, they tend to lean more towards the informal
side. In their view, ‘[a]gency is socially embedded and based upon relations
both in formal and informal spheres of society, and often the distinction
between formal and informal is purely cosmetic’. The essence of their argument
can be seen in the following quote:

There is so much more to current regionalization processes than what-


ever can be captured by a focus on states and formal regional organization.
In many parts of the world, what feeds people, organizes them and
constructs their worldview is not the state and its formal representations
(at local, national or regional levels), but the informal sector and its
multitude of networks, civil societies and associations (again at many
levels). Of course, people participate not solely in the formal or the infor-
mal sector. Rather, they move in and out of both, and it is precisely these
kinds of interactions and the various forms of regionalism that they
create which studies of regionalization should try to capture. (Bøås,
Marchand and Shaw, Chapter 11)

Structure of the book

There are many alternative ways to structure a collection of this kind. One
possibility is to arrange authors according to their theoretical and paradigmatic
association or identity. However, as should be evident from the sections
above, our theorists are not always easily ‘labelled’ or categorized into neat
paradigmatic ‘boxes’. As in most other discourses, theories about new
regionalism tend to be complex and multifaceted. For instance, should
Hettne (Chapter 2) be seen as a critical or structural IPE theorist, a historical
sociologist, a constructivist, or perhaps a Polanyian disciple? And how
would he define himself? Should Buzan (Chapter 8) be considered a neorealist,
16 Introduction: Theories of New Regionalism

a follower of the ‘English school’ (and, if so, how to ‘label’ this school?), or
is he best understood as a representative of a particular kind of constructivism?
By the same token, should Bøås, Marchand and Shaw (Chapter 11) be seen
as proponents of a particular critical political economy, a realism in the
tradition of Carr, or a post-modern or at least a post-structuralist stance?
Instead of trying to ‘label’ the theorists, the preferred solution for this
volume is to arrange them in rather loose sets of ‘clusters’. In the next
section I focus on groups or clusters of cognate contributions, and then
conclude by describing each of the dozen chapters rather than the four clusters.

Clusters
The first cluster groups Hettne, Gamble and Payne, and Falk, as they all
share some broad reflectivist and critical theory postulates in combination
with their common focus on the construction of world orders. The next
cluster consists of Hveem, Tussie, and Mistry. Somewhat similar to the first
group, this trio of theorists share a concern with global governance and the
way the world is organized. However, in contrast to the former they tend to
be less focused on critical and normative aspects and are more concerned
with ‘problem-solving’ matters such as the efficacy, legitimacy and func-
tionality of multilateral versus regional organizations.
The third cluster groups Buzan and Neumann. At first sight, this pair may
look like an uneasy couple, but they actually share some interesting similarities
as well as differences. Buzan emphasizes a combination of outside-in and
inside-out analysis, which Neumann also elaborates on in detail. In fact,
Neumann argues that Buzan’s regional security complex theory is one of the
most useful approaches in the field, but that it contains a blind spot in that
it fails to problematize whose region is being constructed. Furthermore, in the
updated version of the regional security complex theory, Buzan has moved
towards the constructivist method. Neumann also builds on constructivism,
but certainly of a different kind compared to that of Buzan.
The fourth and final cluster groups Jessop, on the one hand, and Bøås,
Marchand and Shaw, on the other. (To some extent, Neumann could fit
into this cluster as well.) These scholars particularly emphasize post-
structuralist theorizing, and they draw attention to a whole series of region-
alizing strategies and regionalizing actors, who meet, interact and sometimes
compete. In their view, regions are constructed and tightly interwoven with
global and national level processes and practices, so there should be no singular
or one-dimensional understanding of new regionalism.

Chapters
What follows below is a brief presentation of all the individual chapters. In
Chapter 2, ‘The New Regionalism Revisited’, Björn Hettne takes the new
regionalism approach (NRA) as his point of departure, according to which
the new regionalism is defined as a comprehensive, multidimensional,
Fredrik Söderbaum 17

political phenomenon, including economics, security, environment and


other issues. In a rather ambitious attempt to ‘move beyond’ the NRA,
Hettne combines the exogenous and the endogenous processes of regional-
ization. The conventional NRA was primarily based on an exogenous
perspective, whereby globalization and regionalization were seen as inter-
twined articulations, contradictory as well as complementary, of global
transformation. In this chapter, Hettne adds the endogenous perspective,
which more strongly underlines the role of agency and the long-term trans-
formation of territorial identities. Thereafter, Hettne goes on to emphasize
the political content of the new regionalism, whereby the new regionalism
is seen as a ‘return of the political’ (i.e. how various world order models
relate to the new regionalism). Finally, in considering the future of regionalism
the possibility of global human community should not be excluded, Hettne
argues, but a regional political community is logically prior to it. Coexisting
regional communities or even inter-regionalism (rather than asymmetric
multilateralism) may be the best world order we can hope for in the
medium term.
In Chapter 3, ‘The World Order Approach’, Andrew Gamble and Anthony
Payne start out by rejecting the mainstream postulates of neorealism and
neoliberal institutionalism. Heavily indebted to the critical IPE associated
with Robert Cox, Gamble and Payne emphasize that globalization and the
ideological power, or even ‘triumph’, of capitalism has established a new
context within which regionalism has to be rethought. The central puzzle
for them is to what extent states (and particular state/society complexes)
respond to globalization and the new global context by building state-led
regionalist schemes. Although Gamble and Payne are critical of much really
existing regionalism – due to the fact that it is seen as ‘open regionalism’ –
they still see a potential for state-driven regional projects to mitigate the
negative effects of globalization and free market capitalism, and contribute
to a new era of social regulation and community (especially if managed in
an enlightened way and if opened up to the influences and interests of
labour and civil society more broadly).
In the fourth chapter, entitled ‘Regionalism and World Order: The Changing
Global Setting’, Richard Falk assesses the actual and potential contributions
of regionalism to the achievement of crucial world order values, such as
peace, social justice, human rights and democracy. Any such assessment
depends on the global setting in which regionalism is played out, which has
changed dramatically through, first, the ending of the Cold War and,
second, September 11. According to Falk, regionalism is a welcome trend
insofar as it contains ‘negative globalism’, and mitigates ‘pathological
anarchism’ as well as the ‘empire-building’ project of the United States.
Particular attention is given to those real and potential situations where
‘positive regionalism’ can support ‘positive globalism’ and vice versa. Falk
claims that a democratically conditioned regionalism may, at least for some
18 Introduction: Theories of New Regionalism

people, provide a world order compromise between statism and globalism


that has indispensable benefits for the circumstances of humanity.
Helge Hveem argues convincingly – in Chapter 5, ‘The Regional Project in
Global Governance’ – that the world is in need of better governance, and
that in the present world this means regional modes of governance.
Hveem’s main argument is that the strength of regional governance projects
depends on whether they enjoy a comparative political advantage in resolving
global governance problems. If such comparative advantage exists, it is to
do with efficacy and identity but above all with legitimacy and viability.
Hveem analyzes the driving forces and motivations of key actors in the creation
of a rich variety of both formal and states-led as well as corporate and societal
modes of regionalization and regional governance. Attention is also given to
the dynamics of inter-regionalism.
In the sixth chapter, ‘Regionalism: Providing a Substance to Multilateralism?’,
Diana Tussie challenges liberal institutionalism ‘from within’, so to speak.
Regionalism in world trade has both positive and negative implications for
liberalization and for multilateralism, meaning that there is no clear-cut
choice between regionalism and international trade. Most literature on
international trade and regionalism looks at the links between regionalism
and multilateralism as a one-dimensional dilemma between stumbling-
blocks and stepping-stones/building-blocks. In such a formulation, researchers
fail to capture the impact of multilateralism on regionalism. One of Tussie’s
main arguments is that regionalism thrives in the policy spaces left by
multilateralism and that, at the same time, when these lacunae are too
numerous and wide these tensions are replayed in the multilateral sphere.
Regionalism provides substance for multilateralism as, at least for the South,
regional arrangements provide an opportunity for market access these countries
always wished for but had never really been able to extract from unilateral
negotiations.
In Chapter 7, ‘New Regionalism and Economic Development’, Percy Mistry
provides a powerful challenge to the mainstream and orthodox theory of
regional economic integration, particularly the static comparative frame-
work. In a manner akin to many other new regionalist theorists in this
volume, Mistry calls for a rethinking of economic integration and emphasizes
the need for theory that embraces ‘politics, economics, security and culture
as key dimensions of the new regionalism’. However, Mistry laments the
lack of an adequate multidisciplinary and holistic theory of regionalism. As
a step in that direction he argues for ‘pragmatic empiricism’ and an empirical
analysis of the history of regional integration arrangements (RIAs) in the
South and of presently unfolding practical experience. The new regionalism
has, according to Mistry, emerged as a response to new risks in the global
economy and as a strategy to achieve broad social and political (and
economic) objectives. In particular, new regionalism is being embraced
because old multilateralism no longer works. Multilateralism is dysfunctional
Fredrik Söderbaum 19

because it has been ‘hijacked’ by the OECD and G7 governments. Plus it


also depends on interactions among nation-states that have become so
unequal that they have ceased to be meaningful units on which multilater-
alism can reasonably rely for effective functioning.
In Chapter 8, ‘Regional Security Complex Theory in the Post-Cold War
World’, Barry Buzan starts out with a summary of traditional regional security
complex theory (RSCT), with its military–political focus, and looks at
whether it is still relevant in the post-Cold War world. Thereafter, Buzan
updates the RSCT with a new definition of regional security complexes in
order to take account of the formal switch to the constructivist method and
to move away from state-centric assumptions. He argues that the constructivist
approach is necessary if one is to keep the concept of security coherent
while adding ‘new security sectors’ – economic, environmental and societal –
beyond the traditional military and political ones. Buzan investigates the
extent of regionalizing logic in the three ‘new’ security sectors and whether
and how it works. There is also a discussion over the merits of treating
sectors separately – i.e. distinguishing between a series of often overlapping
regional security complexes in different sectors – or amalgamating them
into single, multi-sectoral regional security complexes.
In Chapter 9, ‘A Region-Building Approach’, Iver B. Neumann outlines a
post-structural approach, which can be understood as an application of a
Self/Other perspective to the political project of building regions. One of
Neumann’s central arguments is that the establishment of regions is
preceded by region-builders: i.e. political actors who, as part of some political
project, see it as in their interest to imagine and construct a region.
Although regions are seen as ‘imagined communities’, cultural similarities
and ties are not in and of themselves politically relevant, but are made relevant
by political actors in order to serve some political cause. The region-building
approach seeks to go to the root of where, by whom and for whom region-
building statements and strategies are formulated and made relevant – in
other words, whose region is being constructed. Neumann makes the point
that it is particularly important to understand the dynamics whereby
region-builders seek to present themselves as the ‘imagined centre’ of a par-
ticular region.
In the tenth chapter, ‘The Political Economy of Scale and the Construction
of Cross-Border Micro-Regions’, Bob Jessop shows that since the early 1980s
the construction of cross-border micro-regions is best understood in the
broader context of ‘the relativization of scale’. He argues that the proliferation
of spatial and temporal horizons linked to the relativization of scale, including
different forms and results of globalization, involves very different
challenges and threats for economic, political and social forces from those
that prevailed when the national scale and territorial statehood were dom-
inant. Different scalar processes and strategies often combine to form more
complex networks or strategies as well as tangled hierarchies of regions. In a
20 Introduction: Theories of New Regionalism

fascinating exposé, Jessop highlights the many different ways in which


cross-border regions have emerged in the new era. There are many micro-
regional varieties, policy-directed, informal and spontaneous, and hence no
single micro-regional strategy is likely to predominate. Instead there will be
a large number of strategies, places and scales.
In the penultimate chapter, ‘The Weave-World: The Regional Interweaving
of Economies, Ideas and Identitities’, Morten Bøås, Marianne Marchand
and Timothy Shaw emphasize the close relationship between globalization
and regionalization. This is similar to many other theorists in this volume
and the field more generally. But what differentiates their approach from
others is the deliberate focus on how nexuses of globalization and regional-
ization have created a whole range of diversified patterns of interactions and
responses at the local, national and regional level: i.e. the creation of weave-
worlds. Against this background it is, in their view, important that the
processes of global restructuring to which these terms apply are addressed in
the plural instead of their singular form in order to reflect their multidimen-
sionality. This term should also not be pinned onto one specific type of
actor (most often the state), but should rather reflect the activities of and
interactions between states, firms and community (groups) as well as NGOs
and new social movements.
In the final chapter, ‘Conclusion: What Futures for New Regionalism?’,
the editors highlight some main themes of the book, and underline important
similarities and differences between the theories in order to facilitate
communication and comparison. Integral to this is to look at where the
field may be moving in the first decade of the new millennium. There is also
some discussion of the gaps or silences in the contemporary theoretical
landscape as well as consideration of the impacts of new regionalism on
established disciplines (as well as vice versa). These aspects are important
not only for theoretical reasons, but for their relevance for policy and practice
as well as analysis.

Notes
1. In a general sense, regional integration is seen as ‘forming parts into a
whole’, but in a more concrete sense at least political scientists tend to high-
light the establishment of supranational (regional) institutions and their
independent activities, for instance the European Commission or the Court.
Regional cooperation is more open-ended and less demanding, generally
referring to the fact that actors may cooperate in order to achieve common
objectives in one area in spite of conflicting interests and objectives in
another.
2. For other theoretical overviews of regional theories, see Hettne et al. (1999), Hout
(1999), Hurrell (1995) and Söderbaum (2002). See also this volume’s A Guide
to Further Reading for some of the most important books in the field of new
regionalism.
3. In this context it should be mentioned that the rationalist and problem-solv-
ing theories are comprehensive ‘schools of thought’ with a massive research
Fredrik Söderbaum 21

output, while the reflectivist and critical approaches are more flexible, explora-
tory and even provisory theoretical constructs. Furthermore, the latter group
consists of a much more limited number of scholars and theorists, who often
interact in overlapping and interactive research networks.
2
The New Regionalism Revisited
Björn Hettne

Introduction

This chapter deals with the recent wave of regionalism and regionalization
in the context of global transformation and competing world order projects
which have the purpose of regulating a turbulent global condition. It builds
and elaborates on results from a United Nations University/World Institute
for Development Economics Research (UNU/WIDER) sponsored international
research project on the New Regionalism, for which the author was the project
director. The thrust of this project, which was carried out in the latter half of
the 1990s, was to explore the role of the regional factor in the emerging world
order. Under the assumption that this regional wave was qualitatively new
and that there was a need for a more empirical exploration, the project used
a broad comparative approach that came to be called the New Regionalism
Approach (NRA). The overall purpose here is to move away from ‘region-
centrism’, which may be as limiting as state-centrism, the original sin for
which the UNU/WIDER project was to be a cure. This strong concentration
on the empirical regions must be understood against the background of the
surprising explosion of regional initiatives starting in the mid-1980s in
many parts of the world; and constituting a new wave of regionalization
processes, or what was called ‘the new regionalism’.
In a globalized world, regionalism as such is not the appropriate object for
theorizing. Rather, the focus, as far as regionalism is concerned, should be
on the regional factor or dimension in global transformation. Since this process
is rooted in earlier transformations and world orders, the approach has to be
historical. It has, furthermore, to combine endogenous and exogenous factors,
for instance in the dialectical relation between external challenges and
internal responses. There is also a dialectics with regard to the global political
economy. The liberal order can thus be seen as a response to historical
varieties of dysfunctional regulationism (mercantilism, protectionism,
economic nationalism, state-socialism, etc.), but some sort of regulation
and control is also a response to turbulent liberalization. Regionalism in

22
Björn Hettne 23

some of its forms can be such a response, referred to below as ‘a return of


the political’.
The first section below presents the general approach of the UNU/WIDER
research programme, that is, the NRA. After that, I discuss a number of more
specific elaborations, following from its revealed shortcomings. First, an
elaboration of endogenous and exogenous perspectives on the formation of
regions (sections 2 and 3); and then, a discussion on ‘the return of the political’,
i.e. of how various world order models relate to the new regionalism, as well
as the impact of September 11 on the relative importance of these models
(section 4). The chapter concludes with an empirical and normative discussion
on the future of regionalism as a possible world order (section 5).

The new regionalism approach in retrospect

The earlier theorization about ‘old regionalism’ treated regionalism as a


state-led phenomenon, which simplified the definition of the macro-region
into being a result from some sort of cooperation between a group of contigu-
ous states. Today the region is a more complex and elusive phenomenon,
but in order to make sense of it, it is necessary to see it in relation to the
Westphalian states-system and national space. Thus, the concept of region
is either used with reference to a sub-national region, or to a supranational
region, whether it is a formal regional organization or an area where an
informal process of regionalization takes place.

Old and new regionalism


In the UNU/WIDER research project the fundamental proposition asserted
that there was a new kind of regionalism in the making, a fact that war-
ranted a new approach.1 The differences between old and new regionalism
were originally spelled out as follows:

• Whereas the old was formed in a bipolar Cold War context, the new was
taking shape in a multipolar world order, and in a context of globalization.
The new regionalism and multipolarity were, from a world order perspective,
two sides of the same coin, while unipolarity (I may now add) would
contradict both multipolarity and regionalism.
• Whereas the old was created ‘from above’, the new was a more voluntary
process from within the emerging regions, where the constituent states
and other actors experienced the imperative of cooperation, an ‘urge
to merge’, or the pooling of sovereignty in order to tackle new global
challenges.
• Whereas, in economic terms, the old was inward-oriented and protec-
tionist, the new was often described as ‘open’, and thus compatible with
an interdependent world economy. In fact there is today no alternative,
closure no longer being an option.
24 The New Regionalism Revisited

• Whereas the old was specific with regard to its objectives (some organizations
being primarily security-motivated, others more economically oriented),
the new was resulting from a more comprehensive and multidimensional
societal process.
• Whereas the old was concerned with relations between a group of neigh-
bouring nation-states, the new formed part of a global structural transform-
ation, or globalization, in which also a variety of non-state actors were
operating at several levels of the global system.

Some conclusions drawn from this contrasting of old and new regional-
ism were theoretically significant for the subsequent development of the
NRA. First, the focus on the multitude of actor’s which pointed beyond a
state-centric approach. Second, the focus on the ‘real’ region in the making,
rather than the ‘formal’ region defined by the member states of a regional
organization. This also implied a substantivist, multidimensional view of
the region. Third, the focus on the global context – the process of globaliza-
tion – as an exogenous factor. This factor was not really considered by old
regionalism theory, concerned as it was with regional integration as a
planned merger of national economies through cooperation among a group
of nation-states.
The NRA tried to consider these aspects, particularly those focused on
conditions related to what was called globalization, a phenomenon which
was to give rise to another academic growth industry. Globalism and region-
alism thus became competing ways of understanding the world (Hettne,
Inotai and Sunkel, 1999). Since the impact of globalization differs in various
parts of the world, the actual process of regionalization also differs between
the emerging world regions, thus giving shape to many regionalisms. Glob-
alization and regionalization processes interact under different conditions
of ‘regionness’, creating a variety of pathways of regionalization (see below).

Regionalism and the global economy


The NRA was fundamentally different from the simultaneous discourse on
what was also called the ‘new’ or ‘second regionalism’ among liberal econo-
mists, which can be represented by the International Monetary Fund (IMF)
and the World Bank (the International Financial Institutions, IFIs) (de Melo
and Panagariya, 1993). Pinpointing this gap in understanding the new phe-
nomenon may further clarify the difference between the hegemonic discourse
of multilateral globalism and the NRA:

• Whereas for the IFIs, regionalism was a phenomenon that could be analyzed
through standard economic theory, the NRA contained an interdisciplinary
framework.
• Whereas the IFIs conceived the new regionalism as a trade promotion
policy, building on regional arrangements rather than a multilateral
Björn Hettne 25

framework, for the NRA regionalism was a comprehensive multidimen-


sional programme, including economic, security, environmental and
many other issues.
• Whereas the normative point of view of the IFIs was that regionalism, at
best, could be a second-best contribution to the task of increasing the
amount of world trade and global welfare, and at worst a threat against
the multilateral order, the NRA held that regionalism could contribute to
the solving of many problems, from security to environment, that were
not efficiently tackled on the national level and to which there were no
market solutions.
• Whereas the new regionalism according to the IFIs was ‘new’ only in the
sense that it represented a revival of protectionism or neomercantilism,
the NRA saw the current wave of regionalism as qualitatively new, in the
sense that it could only be understood in relation to the transformation
of the world economy.

A distinction should be made between regionalism as a true trade strategy,


and studies on how the new regionalism transforms the trading system
through trans-regionalism and inter-regionalism. Trans-regionalism refers
generally to relations between regions, and these relations may differ in
terms of comprehensiveness. Inter-regionalism is a more organized or
formal relationship between two regional organizations. Here I distinguish
between trans-regionalism, inter-regionalism and multiregionalism (or regional
multilateralism) as levels of ‘inter-regionness’. I will return to the last concept
in the concluding section.
A comprehensive treatment of trade necessarily leads to treatment also of
other directly or indirectly linked economic issues, which in turn link up with
politics, social issues and security. Where you draw the line of interdisciplin-
arity is a matter of convenience. However, I want to emphasize that regional
initiatives may start or at least become enforced by issues other than eco-
nomic, for instance security and the compulsions implied in state collapse in
certain regions. Trans-regional strategies may therefore also have other aims
than promoting global trade, or – in accordance with the neofunctionalist
hypothesis – they may be transformed and widened by spill-over effects.
The process of regionalization has internal and external structural conse-
quences that also have to be accounted for, such as sub-regionalism, micro-
regionalism, and trans-regionalism. Sub-regions emerge within very large
macro-regions, such as Europe, and may facilitate cooperation among a
grouping of states that have particular interests and problems in common.
Examples are Central Europe, the Baltic area, the Mediterranean, etc. Micro-
regions are sub-national but very often they cross the borders of neighbouring
countries, making them transnational ( Jessop, Chapter 10).
Micro-regions are complex and varying. There are many reported cases in
Europe and Southeast Asia, but a beginning has been made to identify
26 The New Regionalism Revisited

micro-regionalism also in Africa (Söderbaum, 2002; Söderbaum and Taylor,


2003). A common element is a larger room-for-manoeuvre for micro-
regional actors, be they local governments or firms, although the incentives
driving these actors may differ. It seems that they react more to globaliza-
tion than to regionalization, but in case there are emerging macro-regions
there is often a crucial link between macro- and micro-processes. When
macro-regions are being shaped they also provide a political framework
legitimizing more independent behaviour on the part of sub-national
regions. Often these regions coincide with so-called ‘historical regions’
formed long ago, but they also constitute new forms of cross-country coop-
eration between sub-national regions, which suddenly found themselves in
a more advantageous location due to the overall change in the political/
administrative landscape.

Going beyond the new regionalism approach


Looking back, there were of course some limitations and biases in the ori-
ginal NRA that can now be corrected, and by doing so we will actually move
beyond the NRA. First of all, the external dimension – the role of globaliza-
tion – was somewhat over-emphasized in the sharp contrast made between
new and old regionalism. The modified approach, outlined in this chapter,
is therefore an understanding of contemporary regionalism both from an
endogenous perspective, according to which regionalization is shaped from
within the region by a large number of different actors, and an exogenous
perspective, according to which regionalization and globalization are inter-
twined articulations, contradictory as well as complementary, of global
transformation. The endogenous perspective more strongly underlines
the connection between old and new regionalism, for instance the relevant
continuities back to functionalist and neofunctionalist theorizing about
the integration of Europe, the role of agency, as well as the long-term trans-
formation of territorial identities. In view of this, it is important to explore
the contextual and endogenous conditions relevant in each specific case of
regional formation.
The preferred theoretical framework, as far as the exogenous perspective is
concerned, is Karl Polanyi’s ‘Great Transformation’ and the so-called ‘Double
Movement’ (Polanyi, 1957). The double movement approach is to my mind
a simple but fruitful way of looking at the long-term process of transformation
and change from one type of political economy to another. This approach
was originally developed to explain the rise and fall of market society in the
nineteenth century and early twentieth, but is here applied to changes of
the current international political economy, interpreted as a Second Great
Transformation. Again, it is essential to keep in mind the specificity of chal-
lenge and response in each individual case. The distinction between exogenous
and endogenous is purely analytical. In practice these perspectives are two
entry-points into the same process.
Björn Hettne 27

The time has thus come for bolder steps towards a theory of the new
regionalism built on comparative studies and post-structuralist theorizing. It
is also important to see the new regionalism in relation to the logic of net-
working, particularly with reference to Europe where the territorial principle
and the contrary logic of networking coexist to create what must be seen as
a new polity (Europolity).2 If micro-regionalism and inter-regionalism are
internal and external extensions of the regionalization process, the logic of
networking, associated with technological globalization, challenges the ter-
ritorial principle of organization inherent in regionalism and further com-
plicates the relation between globalization and regionalization.3
The study of regionalism should also be related to other more recent the-
oretical breakthroughs in International Political Economy (IPE), for instance
social constructivism (Söderbaum, 2002). In the constructivist approach
regions come to life as we talk and think about them. One may even con-
ceive of regionalism as a world order moving from trans-regionalism, over
inter-regionalism, to multiregionalism. The strong emphasis on the new
regionalism meant that other world order options and the way they could
relate to regionalization were neglected, which narrowed the scope as far as
future options are involved. This limitation is quite natural since the original
research programme was about regionalism as a new empirical phenomenon,
but in order to grasp the current process of global transformation a broader
approach to world order is needed (Hettne and Odén, 2002). Regionalism,
seen as a ‘return of the political’, thus has to be related to governance and,
particularly, global forms of governance (cf. Hveem, Chapter 5).

The rise of regionness

The previous wave of regionalism (‘old regionalism’) was generally understood


as an endogenous process, something that is clearly seen from the early
efforts at theorizing it. Classical integration theories from the 1950s and
1960s primarily dealt with European integration (Rosamond, 2000). The
dominant approach was neofunctionalism, which essentially considered
spill-overs from economic integration to political unity; to that extent it was
interdisciplinary. It also challenged the realist hegemony in International
Relations (IR), which explains the sometimes rather cool reception of
regional integration theory in political science circles. To a certain extent,
this fundamentally (but consciously) Eurocentric theorizing also raised the
issue of ‘comparative regionalism’, although it was difficult to identify the
common elements, or what Haas (1961) referred to as ‘background condi-
tions’. Since there was little regionalism elsewhere to draw on, these elem-
ents were also largely derived from the European experience. The narrow
empirical foundation explains the lack of success in developing a viable theory
of integration (Puchala, 1981). The relative failure of neofunctionalist inte-
gration theory did, according to Tsoukalis (1997: 4), create a ‘disincentive
28 The New Regionalism Revisited

against the search for the overall view’. In contrast, the second wave created
a need for holistic understanding.
The NRA, less concerned with parsimonious theorizing, went beyond
spill-over dynamics to include also security, social and cultural issues. The
increase of regionness is not necessarily intended by the regional actor,
but the political ambition of establishing regional coherence and regional
identity – a translocal ‘sameness’ – was seen to be of primary importance in
the ideology of the new regionalism. As a political project I call this ‘the
pursuit of regionness’ (Hettne, 1993). The level of ‘regionness’ defines the
position of a particular region or regional system in terms of regional coher-
ence and identity, which can be seen as a long-term endogenous historical
process changing over time from coercion, the building of empires and
nations, to more voluntary cooperation (Hettne and Söderbaum, 2000).
Regions are always evolving and changing. A region must be understood
as a process and as a social construction. Like a nation it is an ‘imagined
community’ (Anderson, 1983; Neumann, Chapter 9), and like a nation it
has a territorial base. This space is the first step on the staircase of ‘regionness’.
In very general terms one can speak of five levels of regionness making up,
as it were, ‘a natural history of regionalization’:

• A regional space is a geographic area, delimited by more or less natural


physical barriers: ‘Europe from the Atlantic to the Ural’ or the sub-contin-
ent of South Asia. The region is thus rooted in territory. This territory is
in social terms organized by human inhabitants, at first in relatively isol-
ated communities, but more and more creating some kind of translocal
relationship. The regional space is not static but changes with the process
of further regionalization and increasing regionness.
• A regional complex implies ever-widening translocal relations between the
human groups. In security terms such relations of embryonic interde-
pendence constitute a ‘security complex’ (Buzan, Chapter 8), in which
the constituent units, normally some sort of ‘states’, are dependent on
each other, as well as on the overall stability of the regional system. The
regional system can on this low level of regionness be described as anarchic,
and in the case of a states-system it is normally organized through a
balance of power. It is paradoxically united through its conflicts, and the
regionalization process is typically coercive, manifested in territorial con-
quests and the building of empires and civilizations.
• A regional society can be either organized or more spontaneous, and this
can be in cultural, economic, political or military fields. In the case of a
more organized cooperation, the region is defined by the list of countries
that happen to be members of the regional organization in question.
Such a region could be called the ‘formal’ region in contrast to the pro-
cess of regionalization from below, creating the ‘real’ region (cf. Bøås,
Marchand and Shaw, Chapter 11). The states are not the only but still the
Björn Hettne 29

dominant actors. The pattern of relations is nevertheless regulated and


‘society-like’.4
• A regional community takes shape when an enduring organizational
framework (formal or less formal) facilitates and promotes social commu-
nication and convergence of values and actions throughout the region,
creating a transnational civil society, characterized by social trust also
at the regional level. Convergence can take place in several fields: polit-
ical regimes, economic policies and security arrangements. In security
terms this corresponds to what Karl Deutsch called a pluralistic security
community.5
• A regional institutionalized polity has a more fixed structure of decision-
making and stronger actor capability. In security terms this would be an
amalgamated security community. A looser federation could be another
possible form but we should, rather, expect sui generis formations, different
from what we have seen before. Crucial areas for regional intervention
are the prevention and handling of region-wide natural catastrophies and
emergencies, conflict management and conflict resolution and creation
of welfare in terms of improved regional balance between different areas.
This process is similar to, but not the same as state-formation and nation-
building, since the previous ‘states’ would form part of a larger unit which
could be qualitatively different from a state structure. With a strong civil
society and an accumulation of social capital at the level of the macro-
region, and with a stable inter-state security arrangement, there would be
no need for a regional institutionalized polity; hence one should be open
to other forms. In fact the European Union provides a laboratory for new
forms of governance.

Although these five levels may suggest a certain evolutionary logic, or a


‘natural history’ of regionalization, the idea is not to formulate a stage the-
ory, but rather to provide a framework for comparative analysis of emerging
regions and facilitate a better understanding of the endogenous dynamics.6
Furthermore, as Breslin and Higgott (2000) point out, the appropriate com-
parison of regional projects is at similar stages of evolution, again provided
that ‘evolution’ is not taken too literally. As this chapter argues, the endog-
enous approach must be combined with an exogenous approach in order to
show how the impact of globalization varies between different conditions of
regionness, thereby creating different pathways of regionalization.
Since regionalism is a political project, created by human actors, it may,
just like a nation-state project, fail. In this perspective a region in decline
means decreasing regionness and ultimately a dissolvement of the region
itself. Globalization makes such a situation of non-communication unlikely
for very long. Regional autarchy is no longer an option. Globalization is
here seen as the major exogenous challenge, provoking a regionalist
response.
30 The New Regionalism Revisited

A second great transformation

Analogous with regionalization and regionalism, globalization signifies process,


and globalism signifies ideology and political project. Globalism or ‘global
adjustment’, the current hegemonic development paradigm, implies as its
ideological core the growth of a world market, increasingly penetrating and
dominating the ‘national’ economies. Since this process is synonymous
with increased efficiency and a higher ‘world product’, globalists consider
‘too much government’ as a systemic fault. Good governance is often
defined as less government. Thus, the current ideology of globalism argues
in favour of a particular form of globalization, namely neoliberal economic
globalization. It is a simplification, however, to identify globalization with
neoliberalism. Other political contents should, in principle, be possible.
There is a struggle for the political content of globalization. Stronger regions
would, for example, shape the form and content of globalization in different
ways depending on the political trends in the respective regions.
Globalization is undoubtedly a long-term historical process and in this
perspective globalization and regionalization are indistinguishable. It is, as
was stressed above, only relevant to speak of regionalization when there is a
specific regional dimension, for instance a regional approach to globaliza-
tion. Sometimes the actors do not have a specific regional strategy, but in
their transnational activities they choose a regional arena which may be
accidental and therefore of temporary importance.
The current meanings of ‘globalization’ and ‘regionalization’ are intrinsic-
ally related to the states-system. In fact both processes are undermining this
system and paving the way for a post-Westphalian order of some sort. How
do we know that a new political order is coming about?
A political order is not permanent, although it may be tempting to believe
so under periods of world order stability. Structural change should first of all
be looked for in structures, institutions and mechanisms that are constitutive
of the existing political order. To the extent that such identified constitutive
principles change, we can assume that the whole system is in transform-
ation as well. In the case of the Westphalian order, sovereignty, central authority,
based on varying forms of legitimacy, and territoriality are the most important
constitutive principles. Since few would contest that these principles now
are under stress, we can conclude that some sort of structural change is in
the making.
Will globalization in the current form create world order, or rather a disorder
warranting some kind of regulation of globalization through a Polanyian
second movement? The liberal view of globalization, which still enjoys a
hegemonic position, stresses the homogenizing influence of market forces
towards an open society in a linear perspective. The roots of this way of
thinking can be found in the doctrine of harmony of interests, expressed in
its classical form by Adam Smith in his The Wealth of Nations. It was again
Björn Hettne 31

manifested in the theory of free trade, associated with David Ricardo, and
subsequently echoed in Friedrich von Hayek’s work: ‘The guiding principle,
that a policy of freedom for the indvidual is the only progressive policy,
remains as true today as it was in the nineteenth century’ (Hayek, 1944: 246).
The original historical background for this type of reasoning was antiquated
mercantilist regulation, but subsequently the ‘negative others’ took the form
of protectionism, planning, welfarism or other non-market forms of economic
and social organization. These forms, similarly, appeared equally antiquated
in the globalized condition.
The purpose of political order, according to the liberal tradition, is thus to
facilitate the free movement of economic factors. This is seen not only as a
natural but also as the most beneficial condition. The breakdown of the
socialist system seemed to confirm the liberal principle of evolution: the
‘unnatural’ sooner or later is replaced by the ‘natural’. Interestingly, Polanyi
turned this argument on its head, insisting on the ‘natural’ (moral man) to
regain power over the ‘unnatural’ (economic man).
Any attempt to isolate oneself from market forces is, according to the liberal
view, a sentence to stagnation for a country or even a region. The optimum
size of an economy (and therefore its ultimate form) is the world market. All
other arrangements, for instance regional trade agreements, are only second
best, but acceptable to the extent that they are stepping-stones rather than
stumbling-blocks to the world market. This ‘protectionist threat’ was as we
saw above described as ‘new regionalism’, and its prevention has been a pre-
dominant preoccupation of the IFIs during the last two decades.
One of the basic assumptions in the UNU/WIDER project about the new
regionalism was that it constituted an integral, albeit contradictory part of
globalization. This raised the issue of how to conceive globalization in theor-
etical terms. Since globalization by definition is a worldwide, multidimen-
sional process about which there can be no meaningful explanatory theory,
we have to choose a more specific and delimited entry point for the study of
globalization and the role of regionalism. In the theory of economic history
associated with Karl Polanyi, an expansion and deepening of the market is
supposedly followed by a political intervention ‘in defence of society’; the
expansion of market exchange constituting the first, and the societal response
the second movement, together making ‘the double movement’. This is a
non-linear understanding of globalization, emphasizing contradiction and
change.
It is important to note that both movements, albeit through different
dynamics, are engineered by political forces and actors. The first sequence of
the double movement implies a deliberate institutionalization of market
exchange and the destruction of institutions built for social protection, a
destruction euphemistically called ‘deregulation’ or even ‘liberalization’ in
line with the ideology of globalism. According to Polanyi, the resulting tur-
bulence and social unrest leads to attempts at re-regulation, new institutions
32 The New Regionalism Revisited

of social welfare adapted to the new political economy created through the
transformation. In the historical transformation analyzed by Polanyi these
institutions were an integral part of the modern nation-state.
The re-embedding of the economy is never final. The dysfunctions typically
associated with the second movement and its various forms of political
intervention and regulation lead to a renewed defence and increased popu-
larity of market solutions. Regulation becomes the problem. Friedrich von
Hayek, disgusted with the interventionist ideological menu of the 1930s,
expressed early warnings against political regulation, described as The Road
to Serfdom, the title of his famous book, published in the same year as Karl
Polanyi’s equally classic The Great Transformation (1944). However, he had
to wait long, until the 1970s, for market solutions to become the predominant
approach.
Let us now apply the Polanyian dialectical approach to the current situ-
ation of growing dissent about the benefits of neoliberalism and the view of
the market as a bad master rather than as a good servant. In accordance with
the double movement thesis – that market exchange and political regulation
(mediated by social movements) constitute the basic dialectics of a changing
political economy – contemporary economic globalization, or the globalist
project, can be seen as an effort to institutionalize the market system on a
global scale. This means that the trends towards the creation of regional
formations throughout the world can be seen as one political attempt (among
others) to manage the social turbulence implied in such a radical deregula-
tion, unprecedented in terms of its global scope (Hettne, 1997a). This does
not mean that globalization is uniformly ‘economic’ and regionalization
‘political’. In both processes political decisions shaped by contesting social
and political forces are crucial, and the consequences in terms of distribution
of resources are deeply political. As stressed above, the distinction between
economic and political must not be exaggerated. Here ‘political’ will normally
refer to efforts at creating political communities on various levels of the world
system; but depoliticization or deregulation is nevertheless also political in
its redistributive consequences.
Karl Polanyi’s account of the rise and fall of market society was very
simple, perhaps even simplistic, but he nevertheless pointed at one very
strong and useful generalization. An institutionalized balance between society,
state and market – as a dialectic outcome of the two processes forming part
of the Great Transformation – can be called a ‘Great Compromise’ (Hettne,
2001a). The Bretton Woods system that emerged after the Second World
War was in fact such a compromise. Using a Polanyian term, Ruggie (1998: 62)
labelled this system ‘embedded liberalism’, more precisely defined as trans-
national economic multilateralism combined with domestic intervention-
ism. If the last two decades have been characterized by the predominance of
economics, the time seems to have come for a ‘return of the political’ in
order for another balance, or Great Compromise, to be established. From a
Björn Hettne 33

Polanyian perspective the point is not only a return of ‘the political’ but
equally a ‘return of the social’, and even a ‘return of the moral’. Thus the
second movement is something much wider than state intervention, or for
that matter regionalism. Regionalism is only one possible political response,
important for its effort to retain the territorial imperative.
If the globalist project to institutionalize the market system on a global
scale can be seen as the first phase of a (second) ‘great transformation’
in Polanyi’s sense of the word, we should thus expect various political forces
to shape the future course of globalization; in other words to ‘politicize’
it (in the sense of democratic, civil society control). This will be done
in competition between forces that are neither mutually compatible nor
necessarily benevolent. Stated in this open way, there is little in Polanyi’s
theorizing that provides a firm base for forecasting the design of future
political structures. Furthermore, ‘the second great transformation’ takes
place in a global context, with different manifestations in different parts of
the world. Some of these manifestations are local protests, many of which
are not very dissimilar from the countermovements in the original transform-
ation. To be counted as part of a ‘second’ transformation the counter-
movements should, however, address global issues, even in their local
manifestations. This means that they search for a global agenda, realizing
that local power-holders do not exercise full control and that challenges
as well as counterforces express relations between different societal levels.
‘Resistance is localized, regionalized, and globalized at the same time
that economic globalization slices across geopolitical borders’ (Mittelman,
2000: 177).
I thus conceive ‘contemporary globalization’ (Held et al., 1999) primarily
as a further deepening of the market system, which (including its disturbing
social repercussions) now takes place on a truly global scale. We should not
expect a uniform response to this ‘great transformation’ but, as history
shows, many forms of resistance, constructive as well as destructive (Gills,
2000). Regionalism is one of them. But there are others that can be related
to regionalism, as will be discussed below.

Return of the political

There are of course different ways, apart from regionalism, in which a more
regulated world order can be achieved, and regionalism in different forms
may very well be combined with some of these. Below we will therefore dis-
cuss a wider set of world order options and the way they relate to the new
regionalism.
The new ‘universalism’, which Polanyi was so worried about, now reap-
pears in Fukyama’s triumphalist ‘end of history’, in the form of market-led
globalization, or in the optimistic ideology of globalism, according to which
capitalism and democracy are mutually supportive systems. For globalists
34 The New Regionalism Revisited

maximum freedom for the market provides ‘good governance’ and the role
of international institutions is primarily to facilitate this.
According to the non-liberal or at least non-neoliberal more sceptical
view, globalization, in the form of market expansion on the transnational
level and beyond nation-state control, creates a governance gap, which in
turn leads to a search for a more regulated and institutionalized world order.
We may in the immediate future therefore see the ‘return of the political’ in
various forms. To interventionist thinkers who are concerned with the nor-
mative content of the ‘second movement’, the liberal project of globalism is
not realistic; they therefore tend to see the unregulated market system as
analogous to political anarchy, and consequently want to politicize the
global. Many of the classical social theorists (whether conservative or radical)
held that the liberal ideology of ever-expanding and deepening markets
lacked ethical content. Similarly, the morality of the market system, as
expressed in social capitalism which resulted from the Great Compromise,
can, according to contemporary critics of ‘hyperglobalization’, only be safe-
guarded by some kind of organized purposeful will, manifested in a ‘return
of the political’, or ‘reinvention of politics’ (Beck, 1997; Gamble, 2000), for
instance in the form of new social movements and a ‘new multilateralism’,
in which a more symmetrical relationship between the regions of the world
would be possible (Cox, 1997, 1999; Gills, 2000). The return of the political,
or what Polanyi would have called the re-embedding of the market, may
appear in various forms, some of which will be considered below, particularly
in the way they relate to regionalism of different kinds.

Regionalism and neo-Westphalianism


One possible form in which the political may return, assuming a continuous
role for state authority, is a reformed ‘neo-Westphalian order’, governed
either by a reconstituted UN system, what can be called assertive multilateralism,
or by a more loosely organized ‘concert’ of dominant powers, assuming the
privilege of governance by reference to their shared value system focused on
order. This model, which also includes the right to military intervention,
can be called militant plurilateralism.
The plurilateral model of political order is known from the nineteenth-
century system of power balance called the Concert of Europe, a regional
system increasing its regionness by moving from ‘complex’ to ‘society’. This
concert arrangement was based on consultations among the great powers,
who acknowledged their equal status and agreed to protect established
members of the states-system and, consequently, to prevent territorial
change or domestic upsurge. The system was essentially conservative, and
therefore in the long run bound to be undermined by the changing realities
on the ground (Elrod, 1976; Jervis, 1986).
Polanyi referred to this historical period as ‘the hundred years’ peace’, the
title of the famous first chapter of his book.7 Disregarding realist theory, he
Björn Hettne 35

emphasized that the balance of power system could not by itself ensure
peace. This was actually achieved with the help of international finance
(Polanyi, 1957: 15). Finance interests may benefit from limited wars but
were instrumental in preventing general war as being destructive to product-
ive investment. Similarly, today the global financial elites might in view of
the recent crises share an interest in some kind of re-regulation in the interest
of systemic stability (Helleiner, 2000). This may also be organized on the
regional level in the form of ‘monetary regionalism’, and is most likely to
first happen in Asia (Breslin and Higgott, 2000: 337).
Plurilateralism is, unsurprisingly, favoured by realists. Henry Kissinger
(1992, 1996) has argued for a recreation of a power ‘concert’ in the current
world situation. This is not surprising, since from a realist point of view it is
the only realistic model. The contemporary concert will be constituted by
global powers: the United States, Europe (the EU), Russia (the Soviet Union
in the original Kissinger Model), Japan, China and India. In contrast, the
nineteenth-century Concert was a regional system, but this is no longer pos-
sible according to Kissinger (1996: 180): ‘Never before has a new world order
had to be assembled from so many different perceptions, or on so global a
scale.’ However, in the case of regions with a low level of regionness on the
security dimension and with comparatively consolidated nation-states, a
regional concert arrangement seems appropriate. An ‘anarchical society’
would be the best solution in the short run, and would also be an improve-
ment as far as security is concerned. This option has recently been discussed
in the Asia-Pacific context (Acharya, 1999).
The multilateral model, in a strengthened, more ‘assertive’ form, is based
on radical reforms in order to upgrade the United Nations as a world order model
(International Commission on Global Governance (ICGG), 1995). For instance,
the Security Council must be made more representative, and the General
Assembly should have representatives also from civil society. A strengthened
Economic and Social Council would take responsibility for global development
(International Commission on Global Governance, 1995). The nation-states,
at least the stronger among them, would remain in, or resume control of,
‘their’ development, although they would have to operate ‘in a complex system
of overlapping and often competing agencies of governance’ (Hirst and
Thompson, 1996: 183). Intergovernmental regionalism may facilitate this.
In fact, both the neo-Westphalian models imply a strong Great Power
influence; in the case of assertive multilateralism not only Western powers
but all regional great powers; in the case of militant plurilateralism most real-
istically the trans-Atlantic alliance (which is an inter-regional arrangement).
It is important to take note of to what degree these two models really differ.
How ‘multi’ must multilateralism be? After September 11 we need to distin-
guish between authentic and false multilateralism. Global alliance-building
for a specific purpose, such as fighting ‘international terrorism’, is not neces-
sarily a solid base for sustainable multilateralism.
36 The New Regionalism Revisited

For there to be a significant difference between multilateralism and


plurilateralism as world orders, the UN system has to undergo a major
change, including a reasonable representation from various regions of the
world; in fact a ‘multilateralization’. Both the League of Nations in its time
and the United Nations today have in fact been dominated by a number of
great powers (i.e. plurilateralism), in spite of the principle of one-nation,
one-vote (multilateralism). There should be a better representation by more
regional powers in the Security Council, and these regional powers should
in turn be acknowledged spokesmen for their regions.
So far, the various reform proposals dealing with the UN system have only
to a limited extent been implemented. As was made clear in the recent UN
failure to protect human rights in Palestine, it cannot but be an extension
and function of the states-system. Therefore, it may be unreformable as long
as the Westphalian logic prevails. A neo-Westphalian logic would permit a
more inter-regionalist approach.
On the other hand, the more realistic scenario of plurilateralism, particu-
larly in its militant form demonstrated in Kosovo, is hardly consistent with
still predominant principles of international law. It is admittedly true that
international law is a process, and that the sovereignty argument now is
increasingly contradicted by the human rights argument in favour of
‘humanitarian intervention’ (DUPI, 1999; Kosovo, 2000). The question remains,
however, who is the legal intervenor in domestic humanitarian emergencies,
not to speak of who is to wage war against international terrorism. NATO’s
prominent role in this regard is due to its military strength and the high
degree of institutionalization that survived the Cold War, not its inherent
legitimacy as world police. Nor can an alliance of the type that was built
after September 11 be maintained for long without some institutionaliza-
tion and transfer of power to supranational bodies. Again, further multilat-
eralization seems to be the remedy. One way to do this would be to let the
regions be represented in the United Nations.

Regionalism and post-Westphalianism


Regionalism can be part of not only neo-Westphalian but also post-West-
phalian governance patterns, which is another possible return of ‘the political’
(cf. Hveem, Chapter 5). In a post-Westphalian order the locus of power
moves up to the transnational level. The states system can be replaced or
complemented by a regionalized order of political blocs, i.e. the new regionalism
discussed in this chapter, or by a strengthened global civil society supported
by a ‘normative architecture’ of world order values. Richard Falk (1999; and
Chapter 4, this volume) refers to this model as global democracy or humani-
tarian governance; elsewhere it is also referred to as global cosmopolitanism or
cosmopolitan governance (Archibugi and Held, 1995; Held, 1995; Kaldor,
1999). It is, in short, a world order based on global values and norms, and
the rule of law, monitored by a vigilant civil society, the result of which
Björn Hettne 37

would be ‘humane global governance’ (Falk, 1995a). Although such a world


order may seem to contradict regionalism, it would largely correspond to
Polanyi’s ‘human society’. Karl Polanyi nevertheless envisaged the post-Second
World War order as a horizontal world of regions.
Changes in the structure of world order have often been connected to war
situations, which by their nature tend to speed up the pace of change. The
end of a major war is thus a situation in which a new international order
typically is born. Polanyi, writing in such a situation, saw the self-regulated
market as the great utopia, but in equally strong terms attacked other ‘uni-
versalisms’ based on a more regulative ideology as well (referring to Hitler’s
fascism and Trotsky’s revolutionary socialism). To Polanyi, Pax Americana
should be avoided, since, according to him, the market project that he asso-
ciated with Pax Americana, like other universalisms which had been tried
and which had failed, constituted the great danger – a utopian project – to
worry about. Instead he hoped for a more planned, horizontal world order
with ‘regional systems coexisting side by side’ (Polanyi, 1945: 87). Thus, he
retained his belief in some form of interventionism also in the new order,
but felt that something bigger than the state was needed. Polanyi did not
define regionalism except by contrasting it with, on the one hand, univer-
salism and, on the other hand, virulent nationalism, particularly problematic
in his own Central and Eastern Europe, where ‘hysterically chauvinistic
states who, unable to bring order into political chaos, merely infected others
with their anarchy’ (Polanyi, 1945: 88). For Polanyi the preferred world
order was some kind of regionalism based on a global ethics influenced by
Christianity and Democratic Socialism.
Today’s globalized condition demands a more advanced normative
theory, permitting inter-regionalism in a pluralist, regionalized world order.
Could regionalism perhaps borrow from cosmopolitanism? Both these sce-
narios represent a firmer step towards supranational governance, either on a
regional or a global basis, possibly and preferably in combination. Regional-
ization provokes nostalgic nationalism and may itself become introverted
and ‘fortress-like’. For that reason there is a need for a strong civil society on
the level of the region, transcending Westphalian, state-centric, or ‘old’
regionalism. Transnational civil society is, however, rarely explicitly
regional. The values pursued are often universal, and therefore the region is
no more than a temporary platform for promoting global values.
Regional multilateralism or, in short, multiregionalism, rejects cultural
hegemonism and accepts ‘the desirability of a world order reconstructed
to accommodate intercivilisational identities and aspirations’ (Falk, 2000:
157). In comparing ‘critical realism’ to the World Order Models Project
(WOMP), Falk (1997: 55) says that the latter ‘has the virtue of putting
suffering, urgency, alternative arrangements and the fluidity of the future
at the centre of its analytical and prescriptive efforts’. He furthermore
argues for ‘rooted utopianism . . . to combine what we do know with what
38 The New Regionalism Revisited

we need and aspire to achieve, but reliant on the imagination as much as


on the rational intellect’ (1997: 55; 1995a). The conclusion reached by
Falk is that

Westphalia modes of regulatory authority are already insufficient and


will turn out to be more so in the future, but that Westphalia resistance
to adjustments by the leading centres of state power will remain formidable,
blocking creative innovations. In the face of this reality, the movement
for humane global governance (the preferred post-Westphalia scenario) is
likely to grow stronger. It may, however, be inclined to aim for and
accept neo-Westphalia modifications of statism that realise the normative
(ethical and legal) potential of a statist world. (Falk, 2002: 180)

Finally, it remains to discuss what impact September 11 will have on the


relative strength and realism of different world order models, particularly
with reference to the regional factor (cf. Falk, Chapter 4). If ‘the war against
terrorism’ is a war and (leaving the definitional problem aside) even if it is
just referred to and acted upon as ‘war’, it will minimize the importance of
soft power and strengthen the role of military power in international security
arrangements. Similarly, the role of the nation-state as compared to supra-
national arrangements will increase, arresting the movements towards post-
Westphalian forms of governance and instead favouring neo-Westphalian
or even Westphalian security policies. Of the two forms of neo-Westphalian
governance discussed above, assertive multilateralism does not seem to be on
the agenda, whereas plurilateral action obviously gives away to unilateral
action. This is a neo-imperialist trend which may be abandoned due to rising
global and domestic resistance, or implemented with highly uncertain con-
sequences as far as global governance is concerned. When it comes to
regionalism it was noted above that unipolarity contradicts regionalism,
and that a resumed process of regionalization probably has to await a failure
of unilateralism.
How are the regional arangements and the feeble trans-regional system, to
be discussed below, affected by September 11 and the ‘war against interna-
tional terrorism’? Since this ‘war’ has become a unilateralist movement
strengthening US dominance, the European-led regionalist movement is
facing bad weather conditions. Even the levels of regionness within various
regions are badly affected: the unprecedented aggressiveness of the Israeli
state, the war against Iraq, the declaration of Iran as ‘evil’, the rivalry
between India and Pakistan, the domestic crisis in Nepal, the domestic crises
in Indonesia after Bali, the US anti-terrorist intervention in the Philippines,
the renewed demonization of North Korea, etc. These drawbacks and obstacles
may not, however, prevent the regionalist movement in the longer run
resuming its course. Rather an exhaustion of unilateral power, which is
rather likely, may reinforce this process.
Björn Hettne 39

The future of regionalism

Previously the NRA found itself in an uneasy position between normativism


and positivism, pointing to certain empirical trends identified as regional-
ization, while reading a more positive content in terms of regionalism into
them than perhaps was warranted. The end of the Cold War was expected to
pave the way for a more horizontal type of world order and these empirical
trends seemed to fit this normative position. This last and concluding section
reconsiders the future of regionalism both as an empirical embryonical
movement and in more explicit, unambiguously normative terms.
In the hegemonic liberal discourse, enforced by the enormous power of
the IFIs, which in turn are supported by the WTO, there is no need for alter-
natives, since some sort of correlation (which is quite different from causation)
between economic openness and economic growth is hard to deny, and the
occasional lack of success for policies of structural adaptation always can be
explained away by lack of sincere implementation of the imposed policies.
In this chapter I have compared Karl Polanyi’s 1945 warning against the
utopia of the self-regulating market, as well as his embracement of regionalism
at the end of the Second World War, with today’s so-called anti-globalization
discourse, or what in reality should be seen as a renewed demand for a just
world order.
Thus, the basic idea is that regionalization as well as globalization form
part of global transformation, and the real concern is the understanding
of how a viable world order, the Great Compromise, may come about. The
disrupting social consequences of deterritorialization may generate a
‘second movement’ of political forces intended to halt the process of
globalization in order to guarantee territorial control, cultural diversity, and
human security. Instead of cultural homogenization, there must be an inter-
civilizational dialogue on the level of the macro-regions. A dialogue necessi-
tates a reasonably symmetric power base for regional civilizations; instead
of asymmetry and polarization the structural gap between regions must
be bridged, and the vertical structure of the world order horizontalized
through the strengthening of weak and incoherent regions in the periphery.
Horizontalization should just be seen as a tendency in the right direction.
The world will for a long time remain divided into core, intermediate and
peripheral regions, depending on political stability and economic dynamics.
The possibility of global human community should not be excluded, but a
regional political community is logically prior to it. Coexisting regional
communities – i.e. trans-regionalism or even inter-regionalism – may be
the best world order we can hope for in the medium-long term. In the long
term there is a possible line from trans-regionalism over inter-regionalism
and to multiregionalism. Here I focus on trans- and inter-regionalism as
structural extensions of the ‘regionalized condition’ which are empirically
identifiable.
40 The New Regionalism Revisited

The first step towards increasing what may be called ‘inter-regionness’ is


thus trans-regionalism. As formal macro-regions emerge and take a political
actor role, there will necessarily also be a need for more organized contacts
between these regions. Trans-regionalism is the general concept covering
this phenomenon, whereas inter-regionalism signifies more systematic and
formalized contacts. Multiregionalism, at present just a speculation, is a
form of regionalized world order.
Inter-regionalism, which now has become an established empirical fact,
can provide a compromise between Westphalian and post-Westphalian
logic; between territorialism and supra-territorialism. Compared to global-
ization, inter-regionalism is more rooted in regional formations, and in contrast
to multilateralism it is an exclusive relationship based on conscious political
strategies. The EU–Mercosur relationship is in formal terms a full-fledged
example of inter-regionalism, due to the fact that since 1995 there exists an
agreement between two regional organizations (with formal status since
1999).
‘Triadization’ – the increasing dominance of EU, NAFTA and East Asia in
the world economy – is for many what globalization really is about, and it
can be seen as an informal trans-regionalism among ‘Northern’ or richer
regions; a relationship that also is competitive and potentially hostile
(cf. Gamble and Payne, Chapter 3; Tussie, Chapter 6; Jessop, Chapter 10).
Transatlanticism and Asia-Pacific Economic Cooperation (APEC) bilaterally
links countries in the three regions in the Triad, although APEC also
includes a few Latin American states.
Looking at more formal inter-regional arrangements, which include two
or more regional organizations, there is so far no clear picture on the horizon
(cf. Hveem, Chapter 5).8 Consequently, it is much too premature to speak of
inter-regionalism as a form of transnational not to speak of global govern-
ance. At present one can only identify emerging cooperative networks based
upon some kind of regional organization, but in a context that often is
highly hierarchical. Often the EU constitutes the core or hub in these
arrangements, due to the regionalist ideology of the Union, whereas the
United States participates in trans-regional arrangements, such as APEC, for
more globalist reasons, i.e. to promote free trade globally using the trans-
regional organization as a platform. It is interesting to compare APEC with
Asia-Europe Meeting (ASEM), the former being an inter-state arrangement,
and the latter a sort of advanced discussion club between the two formal
organizations EU and ASEAN + 3. ASEM is thus a more comprehensive, multi-
dimensional type of collaboration. It may be more important politically
than the more formalized EU–Mercosur relationship. On the Asian side,
there is an implicit acceptance of the idea of a more strictly ‘Asian’ com-
munity along the lines of the stillborn East Asian Economic Caucus (EAEC)
initiative and in contradistinction to the Asia-Pacific ‘oceanic’ rather than
territorial regional conceptualization. The ASEM is symmetric in its way of
Björn Hettne 41

operation, whereas the ACP (Africa, Caribbean and the Pacific) is rooted in
colonial relations. Somewhere in between these two cases one can situate
the Barcelona process, that is, cooperation between the EU and its Mediter-
ranean neighbours, where peace and stability is the first priority.
Many of these arrangements are feeble and contradictory, but they never-
theless signify an interest in and a growing need for inter-regionalism in a
more viable form. The uniqueness of ASEM is that it is one of the few inter-
national organizations where the United States is not a member. This is
what makes it inter-regional rather than multilateral (cf. Hveem, Chapter 5;
Mistry, Chapter 7). Multilateral regionalism would imply systematic
relations between all regional organizations, making up a regional form of
global governance. Such a world order can today be seen only in its most
embryonic form. Many of the emerging regions are themselves still weak
constructions and the trans-regional communication will of course be
marked by that weakness. However, a regionalized world derived from this
embryonic form would challenge the homogenizing tendency of contemporary
globalization by working for a multicentric world order, with self-centred
but not autarchic regions, each rooted in historical civilizations. The regions
should be internally multicultural, similar to the historical empires, which
for a much longer time than the nation-states system provided humanity
with a relevant polity. The regions should, furthermore, coexist in a normative
universe of converging cosmopolitan values, created through processes of
intercivilizational dialogue and intersubjective understanding.

Notes
1. A number of regional experts, both senior authorities in the field as well as
younger researchers, contributed about 60 research papers to the UNU/WIDER
project. The results have been published by Macmillan/Palgrave in a special series
consisting of five volumes (Hettne, Inotai and Sunkel, 1999, 2000a, b, c, and 2001).
The first volume deals with the complex relationship between regionalization and
globalization, emphasizing that although both processes form an integral part of
the current transformation of the global system, regionalization has a stronger
element of political reaction to the basically market-driven globalization process.
The second and third volumes illustrate and analyze various national perspectives
on regionalism in the North and in the South respectively. The fourth volume
focuses on security and development implications of the new regionalism. The
fifth has a comparative orientation with the purpose of improving the theoretical
framework and providing a foundation for further research on the role of the
‘regional’ in the current global transformation.
2. As pointed out by Castells (1996, 1998), networking also facilitates regional gov-
ernance and political institutional innovation in the European Union, which he
describes as a ‘network state’ (which would correspond to the fifth stage of the
staircase of regionness).
3. ‘Territory is understood as a contiguous part of the earth’s surface . . . Networks
depict the geographic space as points (nodes) connected by lines (links) . . . the sig-
nificant difference between the two concepts becomes apparent when important
networks become autonomous in relation to territories . . . ’ (Jönsson etal., 2000: 99).
42 The New Regionalism Revisited

4. Hedley Bull (1977) made the distinction between anarchy and anarchical society.
Bull explored what he termed a ‘new mediaevalism’ and also recognized situ-
ations of ‘intermediacy’, in which apects of sovereignty were transferred to other
institutions than the state, thus modifying but not fundamentally changing the
Westphalian logic.
5. Karl Deutsch (1957) identified a pluralistic security community whenever states
become so integrated as to settle their differences without recourse to war. For a
recent discussion see Adler and Barnett (1998).
6. The stage approach was also used by Bela Balassa in his famous distinction
between a free trade area, a customs union, a common market, an economic
union and a political union. These ‘stages’, which referred to agreement among
states, were ideal models and did not constitute an evolutionary theory. Similarly
there is an implicit stage thinking in many of the security conceptualizations dis-
cussed here.
7. The first lines of this chapter deserve to be cited: ‘Nineteenth-century civilization
rested on four institutions. The first was the balance-of-power system which for a
century prevented the occurrence of any long and devastating war between the
Great Powers. The second was the international gold standard which symbolized
a unique organization of world economy. The third was the self-regulating market
which produced an unheard-of material welfare. The fourth was the liberal
state . . . Between them they determined the characteristic outlines of our civiliza-
tion’ (Polanyi, 1957: 15ff).
8. See Telò (2001) for a list of regional and inter-regional arrangements.
3
The World Order Approach*
Andrew Gamble and Anthony Payne

In 1984 George Orwell pictured a world divided between three rival totali-
tarian powers – Eastasia, Oceania, and Eurasia. It was a condition of perpet-
ual war and total mobilization, in which two of the powers were always
fighting the third. Orwell took his names for these three powers from the
three geographical centres of the struggle for territory and resources during
the Second World War. Fifty years later, the same three areas featured once
again in predictions that the world order was dividing territorially and was
heading towards conflict. The nature of this conflict was widely assumed to
be a zero-sum game in which each state competed to improve its relative
share of territory, resources, and wealth within a global total which was
fixed. In this neorealist perspective regionalism simplified and intensified
this conflict by combining the most important states into more or less cohesive
groups under the leadership of the dominant state in each region. The pres-
sure on a region to become cohesive increased in relation to the success of
other regions in unifying themselves. As each regional power sought to
maximize its wealth and extend its territory, the risk of economic wars rose,
because in a zero-sum world each regional power was assumed to calculate
that conflict would yield more benefit than would cooperation.
An even bleaker scenario was put forward by Samuel Huntington (1993).
He foresaw the future of world politics being determined by a clash between
three civilizations – Christianity, Confucianism and Islam. These map on to
the geographical areas described by Orwell, with Christian Europe and the
Americas forming Oceania, battling against the rival civilizations of Western
and Eastern Asia. These three civilizations were seen to be rooted in different
ultimate values and to make claims which are exclusive in character, and
therefore beyond negotiation. Since no reconciliation between them is
possible, conflict once it starts is likely to be bitter and prolonged. In other
words, long before September 11 2001, Huntington was already anticipating a

* This chapter draws heavily on and synthesizes the introduction and the conclusion
in our edited collection, Regionalism and World Order (Gamble and Payne, 1996).

43
44 The World Order Approach

return to holy wars, of the sort which used to occur between Christianity
and Islam in medieval and early modern times.
Such gloomy forebodings of economic wars and holy wars appeared at the
same time as predictions of a future of increasing prosperity and peace, the
settling of the ideological conflicts which had dominated world politics for
200 years and the universal acceptance of a common set of ideas about
economic and social organization (Fukuyama, 1992). In this vision intractable
problems remained, but were seen as practical rather than ideological,
belonging to the sphere of technical rather than value rationality. Solutions
to them had to be sought within the institutional framework of free-market
capitalism and liberal democracy. That institutional framework was no
longer in question because it had proved itself the only viable way of organ-
izing modern societies. On this view, which Fukuyama has restated since
September 11, the clash of civilizations will not materialize because there is
only one civilization – Western civilization – which is adapted for survival.
The ethics of ultimate ends contained in Confucianism, Islam, and Chris-
tianity all belong to the premodern stage of social development, and are
destined to be left behind. September 11 is seen as merely one of the last
spasms of the resistance of a traditional culture to the embrace of modernity.
Even in the brave new world of a unified global civilization might not
capitalist states still fight one another as they have in the past? Neoliberal
institutionalists, however, argued that as the world economy becomes more
interdependent, it becomes rational for states to prefer cooperation to
conflict. States increasingly face common problems which can only be
handled through agreement on new institutions and rules (cf. Tussie,
Chapter 6). This optimistic scenario predicts that as interdependence deepens
so the risk of major economic or military conflict should decline. This trend
is reinforced by the observation that democracies do not fight one another,
so that as democratization spreads the less likely it becomes that conflicts
between states will be settled in the future by resort to arms. These theories
thus rejected the assumption that states face a zero-sum game. Instead they
assumed that there is a positive sum game in which states can cooperate
either through competition or through intergovernmental negotiation to
increase the total output of goods and services available for distribution.
Economic welfare can be improved for everyone so long as positional goods
such as territory and resources do not become the focus of competition.
These scenarios were at such variance in their predictions of the future
that they hardly seemed to be describing the same world. Yet such conjunc-
tions of pessimism and optimism are not new. They seem inseparable from
how modernity is experienced. Polarization of views about the future is
often found at times of increasing change in the global political economy.
The 20 years between 1971 and 1991 was such a period. It opened with the
breakdown of the Bretton Woods international monetary system, the first
major sign of the weakening of United States hegemony, and ended with
Andrew Gamble and Anthony Payne 45

the collapse of the Communist regime in the Soviet Union and the disinte-
gration of the Soviet state. These were contradictory events for the future of
the world order. The end of the Bretton Woods system brought American
hegemony into question and inaugurated a time of increasing doubt about
US capacities and political will to sustain the burdens of its global interests
and responsibilities, while the collapse of the Soviet Union appeared to
vindicate the United States post-war strategy of containment and left it
without any serious military rival. It also marked the end of the oldest
regionalism in the global political economy, the division between the capitalist
and the socialist worlds which developed after the Russian Revolution. The
unity of the global political economy was restored for the first time since
1914 and the era of national protectionism and rivalry between socio-
economic systems ended. This event, which occurred much earlier than
most observers predicted, appeared as a dramatic confirmation of the trends
towards globalization in the world economy, and their ability to undermine
and at times sweep away established political structures.
It was against this background that awareness that new regionalisms were
beginning to emerge, notably in the three broad regions of Europe, the
Americas and Asia-Pacific, assumed some significance. Globalization might
have been on the march, but many observers remarked on the ‘fortress’
dimension of the 1992 project of the European Union (EU), others gave an
alarmist reading of the defensive impulse which they detected behind the
negotiation of the North American Free Trade Agreement (NAFTA), as well
as doing all they could to write up the importance of initiatives such as
Asia-Pacific Economic Cooperation (APEC). It was this striking conjuncture
of an apparent resurgence of regionalism at the same time as heightened
awareness of trends towards globalization that prompted us to initiate a
collective research project within the Political Economy Research Centre
(PERC) of the University of Sheffield designed to find a more subtle way of
reading these events than was then offered by existing bodies of theory. We
developed a ‘world order approach’ to the study of this new regionalism
derived in good part from the theorization of world order advanced by
Robert Cox (1981, 1983 and 1987) as part of the turn towards a ‘new inter-
national political economy’ made by a small, but significant, number of
critical theorists at the beginning of the 1990s.

New international political economy

Underpinning the many emergent critiques of mainstream neorealist and


neoliberal international political economy (IPE), although not often fully
articulated, was an important philosophical point. It was made most effectively
by Murphy and Tooze (1991) in a volume which first advanced the call for a
‘new’ (or heterodox or critical or counterhegemonic) IPE. They argued that
beneath the surface impression of a field where many voices were heard
46 The World Order Approach

there existed a methodological orthodoxy which shaped much of the


substantive output of mainstream IPE. This orthodoxy was characterized by
a largely unquestioning positivism and overrode the apparent contest
between the respective concepts and theoretical constructs of the conven-
tional competing paradigms of the IPE field. In other words, Murphy and
Tooze identified the IPE mainstream not so much by its preoccupation with,
or privileging of, certain issues (although that was certainly part of their
critique), but rather by its commitment to a mode of production of knowledge
dependent upon the belief that the separation of subject and object and fact
and value are unproblematic.
A different approach had been developed by Robert Cox, who famously
argued that ‘theory is always for someone and for some purpose’ (Cox, 1981:
128; his emphasis). This claim appeared in a remarkable piece of theoretical
writing first published in the journal Millennium in 1981 and entitled ‘Social
Forces, States, and World Orders: Beyond International Relations Theory’.
This article is really the founding document of new IPE. Cox made his
comment about the bias of theory in the course of drawing a distinction
between problem-solving theory and critical theory (cf. Söderbaum, Chapter 1).
The former took the world as it found it, concentrating its attention on
making the existing relationships and institutions work more smoothly. It
was grounded in a positivist political economy and was typified by most US
neorealist and neoliberal scholarship from the 1970s onwards. The latter, by
contrast, was ‘critical in the sense that it stands apart from the prevailing
order of the world and asks how that order came about’ (Cox, 1981: 129). It
was a theory of history concerned not just with the past but with a continuing
process of change; it was directed to the social and political complex as a
whole rather than to its separate parts; and it contained within its brief the
possibility of identifying the outlines of alternative distributions of power
from those prevailing at any particular time. In short, from this moment
onwards, new IPE was hitched to a different epistemology from the main-
stream. It favoured a reflectivist position which stressed the relationship of
subject and object rather than the conventional position which insisted
upon their separation.
On this basis Cox proceeded to set out his version of a critical theory
appropriate to the study of international political economy. He proposed a
method of historical structures, defined as configurations of forces (material
capabilities, ideas and institutions) which do not determine actions but
nevertheless create opportunities and impose constraints. There is presumed
‘no one-way determinism’ (Cox, 1981: 136) between the three forces, the
question of which way the lines of influence run always being conceived as
a research question. It is also important to stress that in this view people are
not just bearers of structures: they create them. For Cox, historical structures
mean no more, but no less, than persistent social practices, made by collective
human activity and transformed through collective human activity. Within
Andrew Gamble and Anthony Payne 47

IPE, interaction between material capabilities, ideas and institutions is seen


to take place across three interrelated levels: the social forces engendered by
different and changing production processes; the varying forms of state/
society complexes (not just states); and types of world order. This last
concept was an important one in Cox’s lexicon. He acknowledged world-
systems theory as a valuable radical alternative to conventional inter-
national relations theory, but argued that the notion of world order was
preferable to that of world system because it indicated a structure which
may only have a limited duration in time and which does not have the
inevitable equilibrium connotation of system. Order, it should be noted, ‘is
used in the sense of the way things usually happen’; it did not imply ‘order-
liness’ or lack of turbulence in international affairs (Cox, 1981: 152).
What was particularly appealing to us about Cox’s formulation of a critical
theory for IPE was the way he consciously sought to draw upon the best
insights of other preceding perspectives. He thus argued in broadly conven-
tional terms that the varying forms of state which derive from different
state/society complexes still remain the crucial level of analysis. But, in
addition, he also incorporated into his thinking the wide reach of world-
systems theory, the traditional historical materialist concern with social
forces, and the particular Gramscian preoccupation with ideas and ideologies
as sources of power. This last aspect of the package, which was developed
more fully by Cox in another later article which served to introduce Gramsci’s
ideas to the international relations community, was especially important
because, as we have seen, mainstream IPE has always been very much preoc-
cupied with materialist definitions of power. Yet, as Cox (1983: 168) himself
has put it, ‘ideas and material conditions are always bound together, mutually
influencing one another, and not reducible one to the other’. The insertion
of an idealist dimension into the standard framework of analysis was thus
another novel feature distinguishing new IPE from the mainstream.
The greater richness of such a perspective can be demonstrated most
effectively by counterposing the Coxian, or neo-Gramscian, account of
hegemony with that offered by neorealist and neoliberal IPE. The most-
cited definition within this latter paradigm was provided by Keohane who
described hegemony as a ‘preponderance of material resources’ (Keohane,
1984: 32). For him the elements of hegemonic power, as they relate to the
world economy, were comprised of control over raw materials, markets and
capital as well as ‘competitive advantages in the production of highly
valued goods . . . involving the use of complex or new technology’ (Keohane,
1984: 33). These material resources then provided the means by which the
hegemon could both make and enforce the rules of the world political
economy. Power is thus conceived in traditional resource terms and hegemony
is deployed as force. Cox took a different line. For him hegemony meant
‘more than the dominance of a single world power’ (Cox, 1987: 7). Instead,
it is understood as ‘dominance of a particular kind where the dominant
48 The World Order Approach

state creates an order based ideologically on a broad measure of consent,


functioning according to general principles that in fact ensure the continuing
supremacy of the leading state or states and leading social classes but at the
same time offer some measure or prospect of satisfaction to the less powerful’
(Cox, 1987: 7). Thus ‘there can be dominance without hegemony; hegemony
is one possible form dominance may take’ (Cox, 1981: 153). Crucially,
hegemony is seen as bringing together both coercive and consensual
elements of power. It is important to emphasize this. Although the novelty
of this approach compared to most of the mainstream lies in the attention it
gives to the role of ideology in establishing and maintaining a hegemonic
world order, it does also theorize the objective elements of power which
lead to the capacity for the exercise, ultimately, of coercion. To exercise
power, as Machiavelli observed, rulers had to learn to be like the centaur,
using both natures, human and bestial. One without the other would not be
effective (Machiavelli, 1988: 61). The stronger the position of the ruling
group or state, the less the need for the use of force. By using such categories
Coxian theory is substantially more nuanced than mainstream approaches
and catches more of the essence of hegemony.
There are some problems with Cox’s account of hegemony, notably a failure
fully to separate out all the various elements which constitute hegemony
across different structures of power (Payne, 1994: 153–4). He has also been
taken to task for consistently stressing the importance of ideas in his the-
oretical work and yet falling back on more straightforward class analysis in
his empirical work. Even so, his innovativeness was crucial in opening up
the field of new IPE. He inspired and legitimized a wider and a deeper range
of thinking than was previously possible. New IPE has thus come to consti-
tute a loose college of scholars and a diverse range of approaches. What they
all have in common and, most importantly, what differentiates them from
the mainstream is, firstly, a commitment to give due weight to both
structure and agency in their explanations, and, secondly, an awareness that
globalization, although still uneven and incomplete, is nevertheless suffi-
ciently developed to have established a new context within which IPE has
to be rethought.

The contours of the contemporary world order

Viewed in this way, the contemporary world order appears as a quite different
phenomenon from the post-1945 period with which, relatively speaking, we
had become so familiar. There may be no historical precedents which can
easily illuminate the prospects of future developments. The initial stages of
globalization were accompanied by a crisis of US global hegemony in the
1970s and its attempted reconstitution in the 1980s, and the depth of this
crisis made many aware that control of the world order had slipped beyond
the capacity of any single state, and perhaps even any group of states, to
Andrew Gamble and Anthony Payne 49

exercise hegemony in the manner of the United States after 1945. Moving
into the vacuum left by the vagaries of US financial policy after 1971 and
inspiring and drawing sustenance from the ascendancy of neoliberal ideas
during the Reagan years, a ‘transnational managerial class’ (Cox, 1993: 261)
or ‘an international business civilisation’ (Strange, 1990: 260) has come to
the fore, based in the major private banks and global corporations. Under its
auspices a new global economy, grounded in production and finance, has
begun to emerge, even if very unevenly and uncertainly, replacing the
former Bretton Woods international economy premised upon exchange rela-
tions between national economies. This change is associated with other
technological and organizational trends, such as the rise of the information
economy, automation of production, robotization, the dematerialization of
production and post-Fordism, all of which have been much discussed.
Nevertheless, the formative aspect of the new global political economy is
seen to be the structural power of internationally mobile capital (Gill and
Law, 1989). States now have to recognize the power not only of other states
and inter-state organizations, on which international relations analysis has
traditionally focused, but also of international capital, the banks and the
foreign exchange markets, all of which constantly scrutinize what states are
doing and have the means, by either bestowing or withdrawing their favour,
to force them to adopt economic policies appropriate to capitalist interests.
This argument can easily be overstated. This is not the first time there has
been a global economy, and even at the height of the national protectionist
era, financial markets and capitalist interests exerted great power over
national economic policies. But aside from some determined sceptics there
is wide acknowledgement that something qualitatively new is happening
and that, even in its weaker forms, the trends towards globalization change
the way we think about the behaviour of states. The process was initially
described within new IPE as the internationalization or transnationalization
of the state, by which is meant, simply put, the adjustment of national
political practices to the exigencies of the global economy (Cox, 1981: 144–6).
In other words, all states – the strong and the weak, the ex-hegemon as well
as the would-be developer – now have to react to the pressures of global
production, choosing broadly between an offensive strategy which takes on
the challenge and usually gives some support to the competitive thrust of
national industries, and a defensive strategy which enshrines protection and
seeks to effect at least a partial withdrawal from world competition in some
sectors. In practice, during the course of the 1980s and early 1990s the
choice has been increasingly resolved in the former direction. Nearly all
states now seek, as it were, to ride two tigers simultaneously: they have to
respond to the structural power of international capital, which demands the
continuing openness of the world economy, and to the continuing pull of
national interests of various sorts, which requires that they compete for relative
advantage in the global economy as effectively as possible.
50 The World Order Approach

Once more Cox, writing in 1987, detected more clearly than most what
may be the implications of these changes for the future of the world order.
In his view, they did not imply that the world was moving towards a system
of self-contained economic-strategic blocs similar to the trend of the 1930s.
The world order was, however, likely to be characterized more and more by
‘an aggressively competitive trading pattern in which negotiating
power . . . determines outcomes’, albeit in a way ‘which tends to encourage
an emulative uniformity in the way problems are confronted and solved
rather than withdrawal into isolated spheres within which distinctive solutions
can be attempted’ (Cox, 1987: 298–9). In sum, Cox suggested that regionalist
and globalizing tendencies would coexist in the next post-hegemonic phase
of the world order. What was understandably left unexplored at that time
was the precise nature of this coexistence.
The PERC research project sought to fill part of that gap. Regionalism was
defined at the outset as a state-led or states-led project designed to reorganize
a particular regional space along defined economic and political lines. It was
thus distinguished from other types of state projects such as globalism
defined in similar fashion as a state-led project conceived at the global level.
State projects generally emerge as the outcome of detailed bargaining and
negotiation among domestic political actors. The concept of regionalism
assumes that states and state actors are a key level of explanation in a theory
of the global political economy. The calculations that state actors make of
their interests and the costs and benefits of alternative courses of action are
the starting point for understanding the wider context of their behaviour.
This wider context is constituted by two kinds of structure – the historical
residues of past social interaction and the emergent patterns of current
social interaction. Together these provide both constraints and opportunities.
Agents do not act within structures; rather they cannot act without repro-
ducing structures, confirming or modifying them through the intended and
unintended consequences of their calculations and actions.
Globalization and regionalization are not state projects but combinations
of historical and emergent structures – a complex articulation of established
institutions and rules and distinctive new patterns of social interaction
between non-state actors. State projects like regionalism typically seek to
accelerate, to modify, or occasionally to reverse the direction of social
change which emergent structures like globalization and regionalization
represent. Such structures define the limits and the possibility of agency and
have continually to be reproduced through the calculations and actions of
agents, including states. The strategic calculations of states is only one level
of analysis for understanding the global political economy but it is a neces-
sary one. If it is made the only level of analysis then it becomes narrow and
one-sided; but equally one-sided is an analysis which conceives of globaliza-
tion as though it were a process occurring outside and beyond the system of
states.
Andrew Gamble and Anthony Payne 51

In practice, regionalism as a set of state projects intersects with globalization,


and the relationship between the two has come into particularly sharp focus
with the end of the Cold War. The world order now has not two but three
cores – North America, the EU and East Asia. The former core around the
Soviet Union has disintegrated, allowing the three embryonic cores within
the former capitalist world economy to emerge as the constituent elements
of the new order. The relationships between these three cores and between
the cores and their peripheries is both complex and diverse. In addition
other forms of regionalism have emerged in regions outside these three
cores, for example in Africa. No single pattern has become established. The
PERC project in its initial stage concentrated on regionalist projects in the
three core regions (Gamble and Payne, 1996), but in subsequent work it was
extended to other regions as well, and to the problems of sub-regionalism
and micro-regionalism (Hook and Kearns, 1999; Breslin and Hook, 2002). In
this chapter we summarize the argument about regionalism in the three
main cores: what they have in common; where they diverge; and relation-
ships between cores and peripheries.

Common features of regionalist projects

One of the most striking characteristics common to all the regionalist


projects is their commitment to a form of open regionalism, which may or
may not be democratic. Although fears have often been expressed that they
might develop towards a closed regionalism and the political authoritarian-
ism which has often accompanied it, these have not so far been realized
(cf. Tussie, Chapter 6; Mistry, Chapter 7). The accusation of ‘Fortress
Europe’ never accurately reflected the broader economic policy objectives of
the Europeans, even if it does capture the essence of their policy to migrants
and asylum-seekers. The move towards regionalism at the end of the 1980s
and during the 1990s was on the whole a step towards globalism rather than
an alternative to it. Open regionalism at its simplest means that policy is
directed towards the elimination of obstacles to trade within a region, while
at the same time doing nothing to raise external tariff barriers to the rest of
the world.
Regionalist projects have often raised fears that they might become exclusive
and protectionist. The creation of a regional leadership and regional institu-
tions that can express a regional political will means that the potential is
always there for that to happen. But although protectionist arguments
began to grow stronger again following the economic shocks of the 1970s
and 1980s they have not yet dominated the policy programme of any party
that has formed a government in one of the leading capitalist states. There
have been protectionist flourishes, as in the steel tariffs imposed by the
United States in 2002, but so far no general return to protectionism. The
nature of the argument has been rather different: not a dispute between free
52 The World Order Approach

trade and protection, but rather between free trade and strategic trade. The
strategic traders have argued that maintaining and improving international
competitiveness needs to be the central goal of economic policy. Instead of
insulating the economy from foreign competition the aim is to expose it to
competition while at the same time ensuring that it is able to meet it. Strategic-
trade arguments deny free-trade arguments that an optimum specialization
of labour dictated by comparative advantage will arise spontaneously. States
instead must act strategically to protect key sectors and ensure that they
become international leaders. These ideas have long been current in political
economy. An earlier formulation was the idea of the developmental state as
opposed to the laissez-faire state.
All the current regionalist projects have been driven to some extent by a
strategic-trade view. One of the benefits of greater regional cooperation has
been the possibility of enabling regional companies and sectors to be
successful in global markets. The emphasis is placed on training, research,
investment, public procurement, and infrastructure, and the need to maintain
legal and managerial control over firms. Strategic-trade assumptions have
always been important in some states, but they became more prominent in
the 1990s. Free traders regard them as a diversion from the task of building a
non-discriminatory open world trading system, and dispute that states are
equipped to plan strategically in the way that companies attempt to do
(Krugman, 1994).
The strategic-trade argument has been carried further by those like Michel
Albert (1993) who argue that there are distinctive models of capitalism
which are regionally specific. The dominant Anglo-American model with its
emphasis on free trade, arm’s-length banking and a laissez-faire policy
regime contrasts with the Japanese and Rhenish models, which emphasize
strategic trade, long-term investment, corporatist and partnership modes of
corporate governance and policy-formation (Coates, 2000). Such models,
however, are ideal types. Although there are some significant differences
between the institutional patterns the differences are easily exaggerated.
Strategic-trade considerations, for example, have always been important in
some sectors of the United States, particularly in defence, while many
sectors in Europe and Japan have been governed entirely by the rules of free
trade.
All the recent moves towards regionalism have therefore been consistent
with open regionalism, and therefore with neoliberal assumptions about
world order. The free-trade/strategic-trade debate does not question that
commitment. This commitment reflects a second factor which all the
regionalist projects have in common: they originate in discussions and
negotiations within the policy-making elites in the core states. There has
been little popular involvement or pressure for such projects, little ‘regionalism
from below’. The elites have devised them in response to changes elsewhere
in the world order. The overriding need to maintain international cooperation
Andrew Gamble and Anthony Payne 53

despite the difficulties of doing so in many areas has been an important


political consideration. The leading states are still committed through the
Group of 7, the International Monetary Fund (IMF), the World Bank and
the World Trade Organization (WTO) to continue to manage the interna-
tional system, to keep it running as smoothly as possible, and to avoid
shocks and crises as best they can. The regionalist projects are not intended
as rivals to this globalist project, but rather as means to help achieve it in a
world where there is no longer a single state with the authority and capacity
to impose hegemonic leadership. But the extent to which regionalism has
now to be promoted as a means of managing world order is itself a sign of
weakness and a potential source of tension.

The diversity of regionalist projects

Although regionalist projects have certain assumptions in common and


have been framed within a common globalist perspective, they are also
quite different from one another. This diversity reflects the different historical
structures which exist within each region, as well as the uneven impact of
globalization. The emergence of a regionalist project in North America has
been the single most significant development in shaping the debate on
regionalism. The United States has been the dominant power within the
Americas ever since the promulgation of the Monroe Doctrine. But
although its dominance has been overwhelming and has tended to increase,
the United States has not previously sought to establish itself as a regional
hegemon. Its power has been exercised more through coercion than
consent in the Americas. The political culture and political identity of Latin
America and the Caribbean has for much of the twentieth century been
framed in opposition to the United States. With the establishment of US
global hegemony in the 1940s the Americas were incorporated within it but
were still often referred to as the United States’ ‘backyard’, which the United
States reserved the right to intervene in at will if it felt its vital interests were
threatened.
In economic policy large parts of the Americas had been incorporated
within a dollar bloc during the 1930s, but with the establishment of the
new liberal world order under US leadership after 1945 the United States
became firmly committed to multilateralism and discouraged any regional
arrangement. The turn in US policy at the end of the 1980s is therefore very
significant, signalling the willingness of the US government to consider a
framework to integrate other states within the region. Bush’s Enterprise for
the Americas and the successful establishment of NAFTA, and the possibility
of extending it in due course to create a Free Trade Area of the Americas (FTAA)
embracing the whole of Latin America and the Caribbean, quickly became a
regionalist project of considerable ambition and scope. One of its aims was
to deconstruct the old identity of Latin America, organized in opposition to
54 The World Order Approach

the United States. The new partnership was to be founded on acceptance of


the basic assumptions of economic liberalism and democracy.
The shift in US policy was partly due to the ending of the Cold War with
the Soviet Union. Communism has ceased to be a military or an ideological
competitor to capitalism, and this has rendered many of the attitudes
towards Latin America obsolete. Some long-standing problems, like Cuba,
remain to be resolved, but no one doubts that when it is it will be done on
US terms. The United States can therefore afford to take a much more
relaxed view towards Latin America, in the sense that it can promote democ-
racy in the region without fearing that it will produce security risks for the
United States. It is in a much stronger position now to assert moral and
ideological leadership, especially since the elites of most of the Latin American
countries have become increasingly keen themselves to abandon their
radical ideologies and to embrace economic liberalism, and in many cases,
democracy.
A second reason for the change in US policy was directly related to US
perception of its own declining ability to act as a global hegemon. The
increasing conflict with Japan over the latter’s ‘unfair trade’, combined with
uncertainty about future European intentions as European integration
advanced, heightened awareness within the United States of the importance
of the regional market to the US economy. The Mexican debt crisis in 1982
was a powerful reminder of just how interdependent the United States and
Mexico had become, and was one of the important steps on the path that
led to the NAFTA agreement. The initiative for NAFTA originally came from
Mexico, but the United States policy-making elite soon became enthusiastic.
The dominance of the United States in the region then made the launch of
the project relatively easy. Canada with some misgivings was forced to join
in NAFTA because of the risks it might have run had it remained outside.
Opposition was considerable within both Canada and the United States,
particularly from labour interests and national-populist groups, fearing the
loss of jobs and the weakening of regulation of transnational capital, but in
both cases it was contained. The opposition forces were considerable, as the
success of a maverick political figure like Ross Perot briefly demonstrated.
But the bipartisan consensus still held.
The EU has appeared at times a very different kind of regionalist project.
After 1985 the project of European integration acquired a new momentum.
The signing of the Single European Act in 1986, the move to Qualified
Majority Voting as the decision rule for many policy areas and the revival of
the plans for economic and monetary union all made the European
Community the focus of international attention. Before 1985 few saw the
European Community as a potential leader of the world order. But after
1985 a new political will began to emerge. The successful launch of the
programme to complete the Single Market by 1992 led to the negotiations
for the Treaty of European Union signed at Maastricht in 1991, which
Andrew Gamble and Anthony Payne 55

committed the EU to economic and monetary union, involving the creation


of a single currency and a European Central Bank (ECB).
Between 1985 and 1992 the EU appeared to be moving towards the creation
of a new unified political core. At present Europe lacks such a core. There is
no single state which dominates in the way that the United States domin-
ates its region. The federalist impulse behind the European project points
towards the creation of a new state, a United States of Europe. Since a formal
agreement of the ancient nation-states of Europe to abandon their separate
sovereignties and create a new European state was never likely, the federalists
hoped to advance towards their goal through encouraging economic inte-
gration. Economic interdependence, it was argued, would create its own
momentum for political union by creating groups with an interest in
promoting the emergence of supranational institutions to coordinate and
develop the economic market. The coordination of low-level technical functions
would both create the need for further coordination and convince elites of
the value of extending such cooperation to other spheres to deal with central
policy issues.
European integration has never advanced smoothly in a linear fashion. Its
progress has at best been cyclical. Periods of stagnation have been succeeded
by periods of movement, such as that between 1985 and 1992, when new
goals are set and new structures created. Nevertheless, despite the evident
deepening and widening of the original European Community that has
taken place in the last 40 years, there is still lively debate as to whether a
genuine political union will ever emerge to complement the economic
union. After the signing of the Maastricht Treaty there were numerous sceptics
who doubted that a single European currency could be achieved, and
certainly not according to the timetable laid down in the Maastricht Treaty.
But the critics were confounded. Although some members, Britain,
Denmark, and Sweden, chose not to join at the beginning, the currency was
successfully launched at the beginning of 1999, with notes and coins being
introduced smoothly and without disruption in 2002. The Euro was weak
on foreign exchange markets at first, but its successful establishment, along
with the ECB, was tangible evidence of the emergence of a further significant
supranational dimension in the EU, making it by far the most successful of
all the regionalist projects at the start of the twenty-first century and
putting increasing pressure on the countries not in the Euro to join (Dyson,
2002).
Europe, however, remains divided over its future direction, a debate
which is reflected in the continuing dispute between French and British
views of how Europe should develop. In economic policy this is an argument
about whether Europe should adopt a strategic or a free trade policy. The
French and British views are not uniform; there are significant dissenters
from the central government line within each country. The French referendum
to approve the Maastricht Treaty in 1993 was won only narrowly, despite
56 The World Order Approach

the strong support of the French government and the bulk of the political
elite for the Treaty. In Britain popular hostility to the Maastricht Treaty and
to further moves towards European integration was pronounced, but a
significant element of the political elite, represented in all political parties,
was in favour of further pooling of sovereignty through intergovernmental
negotiation. The decisive battle will come if and when the Labour government
decides to hold a referendum on joining the euro.
The situation in Europe is further complicated by the continuing unwill-
ingness of Germany, although now the preponderant economic power, to
assert itself politically. This fact itself was a product of the Cold War and the
division of Germany. Now that the country is reunited this reluctance of
Germany to assert itself is likely to diminish. If the project of European inte-
gration is to move forward in the next few decades, German support will be
critical. But future German leaderships will have other options available,
including expansion of economic and political influence towards the East.
The continued willingness of Germany to participate in the European
project will be tested. The sacrifice of the mark and the Bundesbank in the
cause of European Union were strongly opposed by sections of German
public opinion and, although the underlying rationale for further integra-
tion remains strong, it is not clear whether a unified political core for the EU
will emerge. The Constitutional Convention established in 2002 under the
chairmanship of Giscard d’Estaing is attempting to find a political frame-
work under which further progress, including enlargement to twenty-five or
thirty members, can take place.
The third regionalist project, in East Asia, is the least well-defined, and the
least advanced. In the Americas there is no dispute over the state which is
capable of becoming the regional hegemon. In Europe there is no prospect
at present of a single regional hegemon emerging. Capacity and resources
are divided relatively evenly between Germany, France, and Britain. But the
combination of these states in the EU has the potential of creating a very
powerful regional hegemon. In East Asia, however, the region is the least
well-defined of the three. Multiple identities exist. There are two potential
regional hegemons in Japan and China, as well as involvement in the region
by two other powers, the United States and Russia. The region is still divided
ideologically and there are major unresolved security issues. The state
currently best equipped to launch a regionalist project, Japan, is character-
ized by weakness in decision-making and an unwillingness to assert itself
politically. As in other regions a considerable amount of regionalization has
taken place, centred on the interaction of other states in the region with the
dynamism of the leading economy. East Asia, however, is a region without a
single centre from which a regionalist project could emerge. Before the East
Asian financial crisis Japan shunned the promptings of Malaysia to take a
much more active leadership role in the region through the East Asia
Economic Caucus (EAEC). Instead it gave priority to APEC which, because it
Andrew Gamble and Anthony Payne 57

also involves the United States, is a guarantee against the development of


any closed regionalism project in East Asia. Out of APEC a free-trade agreement
might eventually emerge, but its main role at the moment appears to be to
head off other kinds of regionalist project. Given Japan’s involvement with
global trade there is little possibility that Japan will seek unilaterally to
develop a regionalist project which in any way excludes Europe or the
United States. But the Japanese have naturally become concerned about the
development of regionalist projects in the other two cores of the world
economy. If Japan were to espouse a more explicit regionalist project in the
future it would be in response to further developments in the regionalist
projects in the Americas and in Europe. But it would also require an explicit
understanding with China.

Cores and peripheries

As already indicated, regionalization refers to those processes which deepen


the integration of particular regional economic spaces. There are many ways
of measuring it, but particularly important are flows of trade, investment,
aid and people. Regionalization can develop prior to any cultural or political
unification and may be the spur to such unification (as the neofunctionalist
theory of European integration predicts); or it may occur within a territory
that has already achieved political union. Regionalization like globalization,
however, is normally uneven in its impact. Certain places and sites will be
integrated while others are marginalized. Unless the regionalist project
embraced by the core explicitly addresses the issue of inequality and uneven
development, the process of deepening integration is also likely to be a
process of increasing polarization (cf. Hettne, Chapter 2; Falk, Chapter 4;
Tussie, Chapter 6; Mistry, Chapter 7).
The structural weight of the cores in all three regions has created
asymmetrical relations. The cores act as powerful magnets which drag other
states into their orbit, and with the collapse of alternative models of devel-
opment this trend has become ever more pronounced. The increasing incor-
poration of Mexico within the US economy is one illustration; so too is the
network of relationships which have been built up in East Asia through aid,
investment and exports by Japanese companies. The result is an economic
structure in which an increasing amount of Japanese production is located
in other parts of East Asia, but the technology remains Japanese and the
business strategy is firmly controlled from Japan. Countries are eager to
interact with the core because they perceive it as a means to increase their
own rate of growth and wider social development, however unequal the
relationship with the core may seem. There is no evidence that regionalization
moves different parts of a region closer together. The same phenomenon of
cumulative uneven development long evident in national economies is also
true, often more so at the regional level, because of the difficulty of organizing
58 The World Order Approach

even the modest redistributionist measures which are often found at the
national level. Many regionalist projects, including NAFTA and APEC, have
no institutional mechanisms for redistribution.
The position is most stark in the case of Eastern and Central Europe. The
core that is still in the process of formation as the EU is itself internally
divided, with a sharp regional split between the richest regions in Germany,
France, and the Benelux countries and some of the southern and western
regions. But this divide is dwarfed by the scale of that between the EU and
the impoverished territories to the east, all of which have suffered (from a
very low base) a sharp fall in output, employment and investment. These
countries have been rapidly penetrated by EU capital, particularly German
capital, but they are also at the same time seeking entry to the EU as full
members. The enlargement issue is a huge challenge for the EU as it is
presently constituted, because of the difficulty of managing convergence
between economies with such different levels of economic performance.
What happens in this situation is that the core reduces the countries of
the periphery to satellite status, at least in economic terms. Aid is provided
but at the price of the imposition of adjustment programmes and stabilization
packages on countries whose economic performance is poor. The question is
whether the impact of this kind of regionalism on the periphery is sustainable,
given the huge adjustments that are often involved and the austerity
programmes that they entail. Some estimated the cost of the package
needed to lay the foundations for long-term economic growth in Eastern
and Central Europe as equivalent to a new Marshall Aid Plan. What was
offered fell far short. But with the end of the Cold War there was no longer
any ideological or security incentive to provide aid on this scale, and the
preoccupations of local electorates in the regional cores made it extremely
difficult to provide even if a political leadership had emerged which was
prepared to give it priority. The result was an uneasy stand-off. The potential
regional hegemons in all three areas are mainly preoccupied with relatively
small parts of their regions and show few signs of endeavouring to construct
a more permanent and inclusive framework within which to assert their
leadership and address some of the more deep-seated problems in their
regions.

Hegemony and world order

The present stage of world order after the end of the Cold War displays no
simple pattern. The United States is no longer hegemonic over the capitalist
economy in the manner that it achieved in the 1940s, 1950s and 1960s. But
in some fields, particularly the military and the cultural, its dominance is
greater in the 1990s than it has ever been. It has become the undisputed
superpower, able to intervene militarily more or less at will. The collapse of
Communism and the disintegration of alternative development strategies in
Andrew Gamble and Anthony Payne 59

the Third World have reunited the global political economy around the
ideological principles of the United States. But the United States now lacks
both the capacity and the political will to relaunch itself as the global
hegemon. To do so would require a huge commitment of resources to
develop disadvantaged regions of the world economy – particularly in Eastern
and Central Europe, Latin America, Africa, and South Asia. No such
commitment is likely to be made by the United States. All the political
pressure in its deadlocked political system has moved it in the other direction,
towards disengagement and unilateralism, trends which became still more
pronounced after George W. Bush became President in 2001. September 11
has not fundamentally altered this drift, although it has made the United
States much more interventionist in military terms to secure its interests.
A curious situation has arisen. Capitalism has triumphed and almost
everywhere the opposition to it has collapsed. But in the moment of its
triumph the political capacities to make its triumph permanent are inadequate
for the task. The new global order based on the principles of free-market
capitalism and liberal democracy is likely to prove unable to extend the
benefits of prosperity and economic development to all the states that now
seek it (cf. Hettne, Chapter 2; Falk, Chapter 4). Capitalism and democracy
have never enjoyed greater legitimacy as organizing principles than they
possessed at the end of the twentieth century. But legitimacy does not
simply depend on the claims of the powerful; it also depends on the active
consent of the powerless. If the governance of the world order fails to
address the many acute problems that the global political economy is creating,
then a new radical challenge to capitalist civilization may arise.
Regionalism is in part a response to this situation. If a global hegemony
organized around one state is no longer possible, might not a number of
regional hegemonies be more successful? The United States, the EU, and
Japan might use the undoubted economic dominance they enjoy in their
regions to establish a political and security framework and a set of economic
institutions which promote prosperity and development through trade,
investment and aid. If such regionalist projects embrace open regionalism
they would still be compatible with the pursuit of policies at the global level
through the Group of 7 to stabilize the world economy and maintain
economic growth.
The intentions of the regionalist projects, however, are much more limited
than this. What is often described wrongly as the regional hegemony of
Japan and the United States is based more on dominance and traditional
asymmetries of power than on true moral and political leadership. The key
aspect of hegemony, that which makes it a rather rare as well as very powerful
political relationship, is the incorporation of subordinate groups through
the granting of special privileges and benefits. Usually this involves not
simply the acceptance of a common set of ideological principles but the
construction of a new identity in which both leader and subordinate share.
60 The World Order Approach

US global hegemony was founded on the development of just such a new


identity, that of the ‘West’. In East Asia the emergence of a settled identity
seems problematic in the short term at least, while in the Americas the long
historical suspicion of the United States may make the consolidation of the
new liberal democratic identity difficult. The best prospect would appear to
be in Europe, although even here there is a conflict between using the new
political identity of ‘Europe’ as a basis for unifying a new ‘core’ or for creating
a wider political association embracing the states of Eastern and Central
Europe as well as the Balkans, Turkey and North Africa. Despite the rhetoric,
the dispute between Britain and France is really an argument over how the
core should be organized. While this remains unresolved the EU is in a very
weak position to develop as a regional hegemon.
If there is no longer any prospect of a global hegemony re-emerging based
on a single state, and if regional hegemonies are also proving slow to
emerge, and may indeed never emerge, what kind of world order will be
feasible in the future? Two further scenarios for the future of world order are
worth considering. Both move beyond the simplistic scenarios discussed
earlier. The first is a cyclical view of the development of world order. It
suggests that each world order, even the most powerful, only has a limited
span. Eventually the organizing principles on which it rests become
exhausted and decay, giving rise to new challenges. Karl Polanyi (1957), for
example, argued that the triumph of the doctrines of free-market economics
in the nineteenth century eventually produced a reaction in the form of the
reimposition of social regulation on market activities (cf. Hettne, Chapter 2).
The rise of collectivism in the twentieth century followed. But what
Polanyi did not foresee was that collectivism in the varying forms of Fordism,
Keynesianism, welfarism and state socialism would in turn prove to be
short-lived, and that at the end of the twentieth century all forms of collect-
ivist doctrines would be in retreat, with economic liberalism once again in
the ascendancy.
One response is to argue in turn that the revival of economic liberalism
will prove to be no more permanent than collectivism before it. In time,
resistance will form in response to the damage which unrestricted markets
inflict on human communities and to the need to manage common problems,
the externalities and asymmetries which are inherent in market processes,
but which often cannot be solved by market processes themselves. On this
view, as globalization intensifies and the control of states weakens, the
present world order will descend into a state of anarchy, which will not lack
order in the sense of patterned behaviour, but in which uncertainty will
sharply increase. A point will be reached where the harmful effects of an
unregulated global economy, particularly on the environment and on the
distribution of resources, will bring a reaction and the institution of a world
government. Then history might really end, because the dynamism of so
much of the history of the modern period has lain in the competition
Andrew Gamble and Anthony Payne 61

between states and would disappear. The interdependence of the global


political economy created by the interaction of capitalist and state competition
would be formally recognized through the creation of the appropriate
global institutions to govern it. In short, preservation of the human species
would require the subordination of the principles of free-market individualism
to those of social regulation and community (Arrighi, 1994; cf. Falk,
Chapter 4). This view effectively reinstates the dialectic of history, providing
for one more stage beyond Fukuyama. It receives some support from the
logic of interdependence stressed by the neoliberal institutionalists, which
also points to the possibility of a new era of regulation at a global level,
following the undermining of the sovereignty of nation-states (cf. Tussie,
Chapter 6). The new regionalism is an essential step towards this.
Belief in the approach of a new era of regulation and global government is
rooted in a classic view of world order and the stages of its development. It
assumes that the cyclical pattern of the past will be repeated again. But what
may be happening is rather the birth of a qualitatively new stage in the
development of the world order, which renders redundant many of the
categories we have used in the past for understanding its history and its
future prospects. The idea that world history is always moving to a stage
which is in some sense ‘higher’ than the previous one, more complex, more
integrated, more comprehensive, is hard to abandon. But what we may be
witnessing is the emergence of a global political economy whose basic struc-
tures will no longer change or develop very much. Its governance will be
characterized neither by a world government nor by a system of powerful
nation-states. Instead it will be suggestive of what some have called the new
medievalism (Bull, 1977; Cox, 1993; see also Payne, 2000). The need for new
forms of governance for the global political economy continues to expand
as interdependence increases (cf. Hettne, Chapter 2; Hveem Chapter 5).
These might be provided by new kinds of networks rather than states, but
the provision will still involve political negotiation and decision. Instead of
political authority being defined through sovereignty and territoriality
there will be a complex pattern of crosscutting identities and authorities
(cf. Jessop, Chapter 10; Bøås, Marchand and Shaw, Chapter 11). In this mosaic,
local agencies, national agencies, regional agencies, and global agencies will
all have a part to play.
Such a world order would be extremely complex, and conflicts would be
common. Quite radical changes and shifts could be expected. It would be a
world order of considerable flexibility. There would be no hegemon, and no
requirement for one. Some steering functions for the world economy might
be taken on by the Group of 7, or possibly a putative Group of 3 if the EU
succeeds in forging a coherent political will. But there would be no attempt
to provide an overall political capacity at the global level to deal with problems.
Many of these would be dealt with in other ways, for example by transna-
tional corporate networks. In such a world regionalism would have a role, as
62 The World Order Approach

one level of governance, as a means for states to manage certain common


problems which were identified as being handled best at a regional level
(cf. Hveem, Chapter 5). In this vision successful regionalisms would serve to
add to the overlapping authorities and identities which made up the world
order (Telò, 2001). They would not signal the beginning of a return to the
state of nature and the war of all against all.
4
Regionalism and World Order:
The Changing Global Setting*
Richard Falk

This chapter seeks to assess the actual and potential contributions of region-
alism to the achievement of such widely affirmed world order values as
peace, social justice, human rights, democracy (Falk, 1975, 1992, 1995a).
This assessment proceeds by way of discussing in an introductory section,
several main features of the global setting that have achieved prominence,
initially in the immediate aftermath of the Cold War, and now modified by
the response to the September 11 attacks on the United States as combined
with the trials and tribulations of world capitalism.
The conceptual framework relied upon seeks to clarify the regional
dimensions of world order in a manner sensitive to the unfolding historical
situation. Necessarily, such an effort is both provisional, subject to modifica-
tions as political actors use regionalism to achieve their goals, and normative,
distinguishing those aspects of regionalism that are negative (to be avoided
or overcome) from those that are positive (to be achieved or enhanced).
Regionalism is thus being evaluated in relation to the quest for humane
global governance as a desirable framing of political life for the peoples of
the world (Falk, 1995a).

Background considerations

Of course, many of the fundamental tendencies reshaping world order were


not derivative from the Cold War, especially the complex dynamics of
globalization. However, the preoccupations of the Cold War, its East/West
axis of interpretative logic, made it more difficult to appreciate fully the
impact of globalization, including the various phenomena of backlash being
generated. When the Berlin Wall was breached in November 1989 this ultra-
stable geopolitical scaffolding provided by bipolarity, especially with respect
to Europe since the Second World War, disintegrated before our eyes. The

* This chapter has its origins in Falk (1999). It is considerably revised and updated in
light of recent changes in the global setting.

63
64 Regionalism and World Order

immediate reaction was to exaggerate the discontinuity, neglecting underlying


forces for change that were having a transforming impact in any event, such
as weaponry of mass destruction, technological innovation, environmental
decay, economic integration, a global communications net, and, perhaps most
of all, the rise of networking as a potent form of non-territorial organization
(Castells, 1996). The cumulative effect of these global trends seemed to be
eroding the functional competence and drawing into question the normative
self-sufficiency of most sovereign states (Falk, 1995b, 1997; see Mearsheimer,
1990). To some extent, September 11 reversed these trends, seemingly
returning world politics to its more traditional concerns with global security,
warfare, and the role of leading states. This revival of more familiar concerns
of the Westphalia era may be deceptive, and shortlived, as the new param-
eters of global struggle cannot be clearly associated with a rivalry between
antagonistic states, and so while the most powerful states have recovered a
sense of primacy in relation to market forces, the overall viability of sover-
eignty may be further undermined as neither the mega-terrorist side (Al Qaeda),
nor the counter-terrorist response (the United States) shows fundamental
respect for either the sovereign rights of states or the constraints on the use
of force embedded in international law (Falk, 2003).

Globalization and regionalism: after the Cold War and September 11


The end of the Cold War definitely encouraged a greater emphasis on
globalization, especially its implications for the world economy, and later
on such adverse reactions and contradictory trends as fundamentalism, a
vehicle for religious and ethnic extremism, and on the grassroots anti-
globalization movement (‘globalization-from-below’) (Mittelman, 2000).
How regionalism of varying attributes fits within globalization, as it evolves,
is a central world order concern for which evidence and interpretation is
currently inconclusive, with assessments subject to continuous revision. This
uncertainty is magnified by the unevenness of different regional settings
and of the varying degrees to which economic, political, and cultural life
has been regionalized (cf. Gamble and Payne, Chapter 3; Bøås, Marchand
and Shaw, Chapter 11). Almost any generalization about regionalism seems
suspect, and must be qualified and reconsidered, as well as contextualized
region by region. The traumatic impact, especially in the United States, of
the September 11 attacks refocused our sense of the global agenda in such a
way as to draw attention away from the preoccupations of the 1990s,
including speculation on how regionalism fit into economic and cultural
globalization.
There is one important exception to these admonitions of conceptual
caution. It is persuasive to claim that regionalism as a perspective in this
historical period is a promising focus for both empirical and normative
inquiry, that regionalism identifies emergent trends and structures and
clarifies a distinct array of prescriptions and strategies. Following Hettne’s
Richard Falk 65

assessment, the provision of world order in the near future is no longer


likely to be provided to nearly the extent, as during the Cold War, by hege-
monic state actors of a traditional character (Hettne, Chapter 2; Gamble and
Payne, Chapter 3; Gilpin, 1981; Hettne, 1994, 2002a). But what appears to
be emerging in its place is a new type of world order being shaped from
above by a single dominant state with imperial ambitions, resembling more
than anything else Pax Britannica at the height of the British Empire.
The overall trend towards a weakening of the state, in general, is producing
various adverse types of societal vulnerability to the integrative tendencies
in the global economy and is partly responsible for the intensity and incidence
of pathological forms of anarchy that are dramatically different from the
type of structural anarchy that Hedley Bull has so influentially depicted (Bull,
1977; Rosenau, 1990; Falk, 1998). This menacing type of anarchism arises
from the fusion of networking organizational forms with transnational
visionary politics in a tactically explosive manner that appears to have
uncovered the vulnerability of the most powerful territorial actors, generating
a response that feeds the empire-building ambitions of the United States,
the main target of mega-terrorism. From all sides normal territorial states
(and possibly regions) are squeezed, their autonomy diminished, and they
find their destinies enmeshed with this emergent post-modern geopolitics
in which the central drama is not among states, but between the solitary
hegemonic state and a global terrorist network (Falk, 2003).
Thus, the regional alternative to statism, networking, and empire-building
seems potentially compensatory, in terms of the quality of world order, for
both the erosion of hegemonic balance (as it played out in the Cold War
decades) and the more acute forms of pathology that are afflicting both
weak and failed states. These background conditions are linked to the ending
of the Cold War and the rise of mega-terrorism in the twenty-first century,
especially the collapse of bipolarity, the loss of a capacity to maintain order
within bloc limits, and the recalculation of power relations in a post-
modern geopolitics in which the dominant state is being deeply challenged
at present by a concealed multi-state terrorist network and at the same time
finds itself unchallenged and undeterred by rival states. This new set of
circumstances makes unipolarity plausible as a sequel to bipolarity, at least
in the domain of security. Unipolarity was initially disappointing to its
advocates, partly as a result of a perception by political leaders in the 1990s
of a greatly diminished domain of strategic interests. The ineffectuality of
the unipolar actor also reflected the internal pressures exerted by the American
citizenry on its government to address domestic priorities, as well as a wari-
ness about global engagements, as in nation-building, that could be costly and
yet earned few material dividends. Briefly, the Gulf War (1991) epitomized
the early post-Cold War perception of the persistence of hegemonic stability;
as, after all, here was a successful geopolitical undertaking that proceeded by
fully instrumentalizing the United Nations, and in the process even generating
66 Regionalism and World Order

universalistic claims of ‘a new world order’ legitimized through collective


security mechanisms. Soon after the victory over Iraq in 1991 it became
evident that this ‘unipolar moment’ was to be of brief duration, and that the
idealistic commitment to collective security under United Nations (UN)
auspices that had been so loudly proclaimed a few months earlier was aban-
doned without even a whimper of explanation (Krauthammer, 1991). In the
Bush II presidency that abandonment has become doctrinal, and accompanied
by a seemingly perverse effort to undo many of the most promising initiatives
of the prior decade, including the enhancement of human rights, the pro-
tection of peoples facing severe abuse from their own government, support
for criminal accountability for leaders that commit crimes against humanity
and other international crimes, as well as more general frameworks of
multilateral diplomacy in relation to weaponry of mass destruction and
environmental protection. Seemingly, September 11 has generated a second
unipolar moment, which is focused on the war/peace dimension of interna-
tional society, and in some unresolved fashion seems to pit both Al Qaeda
and the United States against the rest of international society.
Why were the 1990s crises in Somalia, Bosnia, Haiti, Rwanda treated as so
much less deserving of a global community response than was the Iraqi
invasion of Kuwait? (Weiss, 1994; Melvern, 2000; Barnett, 2002). The para-
mount explanations are, of course, oil and civilizational identities, but also
the regional security threat posed by a militant Iraq, likely to possess nuclear
weapons within years, to a strategic ally, namely Israel, as well as to a
strategic region, the Middle East. It is unlikely that the Gulf Crisis would
have occurred in a bipolar world, the dynamics of mutual deterrence inducing
greater prudence with respect to obvious strategic interests, as well as a
reluctance to threaten the geopolitical status quo. Such restraint was oper-
ationalized during the Cold War by the capacity of the superpowers to exert
effective control to prevent unwanted initiatives undertaken by secondary
states such as Iraq (Wallerstein, 2002). But it is also unlikely that the
internal tensions in Bosnia and Somalia would have spiralled out of govern-
mental control, as each country was of strategic importance within a Cold
War setting – that is, warranting the expenditure of lives and resources by
superpowers to maintain a given alignment. At the same time, the end of
the Cold War is by no means uniformly felt with respect to the collapse of
minimum internal order. Lebanon had spiralled dangerously out of geopol-
itical control in the decade following the outbreak of civil strife in 1975,
and superpower interventions failed miserably in the major test cases of
Vietnam and Afghanistan. There is a temptation, in other words, to exaggerate
the ordering achievements of bipolarity and deterrence during the Cold
War era. These achievements did seem considerable in Europe and in rela-
tion to the non-use of nuclear weaponry, but not otherwise, at least if war
prevention is treated as the main test of success. It is true that bipolarity did
produce an overall East/West stalemate, although fragile and periodically
Richard Falk 67

bloody, with respect to major challenges posed for the geopolitical status
quo outside of Europe, as in Korea and China. The outcome in Vietnam was
an exception to this pattern, first confirming the French defeat in an anti-
colonial war of independence and later an American setback in trying to
uphold the geopolitical status quo of a divided Vietnam. Arguably, the shifts
in alignment in Cuba and Yugoslavia also strengthened one side at the
expense of the other, if measured against the then prevailing Cold War
yardstick of success and failure.

Post-Cold War strategic interests


What is somewhat different, however, is the circumscribing of the domain
of strategic interests on the part of intervening states in the North, particu-
larly the United States. The outcome in Somalia, and even Haiti and Bosnia,
has been widely regarded as a matter of virtual indifference, so long as the
external effects are minimized. These external effects are associated with
‘containment’ in the post-Cold War sense, that is, not discouraging the
expansion of the rival superpower/ideology, but the spread of disorder and
violence via a wider war (Bosnia) or the massive generation of refugees (Bosnia
again, but Haiti more centrally where the prospects of even a relatively
small number of black Haitian refugees coming to the United States was
regarded for domestic political reasons as unacceptable) (Mandelbaum,
1994; Falk, 1995c).
The United Nations has been reinstrumentalized since its moment of
prominence in the Gulf during 1990–1, resuming its role as marginal player,
while being somewhat unfairly accused of ‘failing’. Unlike the Cold War
when failure was explained as a consequence of stalemate, it is now more
damagingly seen as the expression of a feeble ‘political will’ on the part of
its principal members. In reaction to these trends, enhanced roles for regional
actors seem increasingly attractive, this possibility being highlighted,
although ambiguously, by the North Atlantic Treaty Organization (NATO)
coming to replace the UN in the Balkans as the principal agency of peace-
keeping. This more assertive NATO role was made manifest in the Kosovo
War of 1999, and post-conflict peacekeeping sequel (Kosovo, 2000). This
NATO initiative is best interpreted as partly a matter of regional security,
partly a belated humanitarian response to the dismal United Nations experi-
ence in Bosnia, and partly an expression of US foreign policy (reasserting
the primacy of the United States in sustaining European security even in the
absence of any external threat of the sort posed by the Soviet Union).
Despite these varied aspects, the prominence of NATO suggested a new
reliance on regional peacekeeping as a geopolitical option.
But security concerns are not the only world order dimension. At least
until September 11, the play of economic forces seemed at least as import-
ant even if not as visually captivating in a media sense. The transnational
economic calculus was being reshaped by the triumph of world capitalism,
68 Regionalism and World Order

which quickly led to the weakening of alliance and bloc ties. Such a temporary
decline in the globalization of security arrangements made regional security
and political economy factors generally more significant, yet not in a uni-
form way. This decline was offset in a contradictory manner by the rising
globalization of the world economy, stimulating tactics for participation
and protection, both types of reaction bearing on regionalist prospects in
this period. The patterns of differing influences and perceptions bearing on
the role of regionalism is complex and confusing. This role is further
complicated by the aftermath of September 11, which has combined the
divergent goals of a wide range of states collaborating in the struggle against
mega-terrorism while at the same time acting to avoid the consolidation of
the American empire-building project.
Europe, North America, and Asia-Pacific, as well as Africa and Latin America,
are currently the critical arenas for assessing the world order roles of region-
alist configurations. In Europe, the collapse of the blocs, a variety of economic
troubles, and the widening of Europe, has definitely slowed the deepening
of the EU, and has possibly deferred indefinitely political integration. So
many factors are at work that causal inferences will always seem argumenta-
tive and inconclusive. Yet there are important differences between Europe
and Asia with respect to regionalist developments. In Asia the United States
was not nearly as involved during the Cold War, allowing economic priorities
to gain precedence, especially in the face of growing feelings of cultural
sensitivity about Western influence and Asian identity (Funabashi, 1993).
Similarly, the United States was no longer concerned with geopolitical
alignments, emphasizing instead favourable trading and investment relations,
which in turn produced post-Cold War tensions that encouraged Asian
interests in defensive regional and bloc approaches. Whether this process
was setting the stage for ‘the clash of civilizations’ is doubtful (cf. Gamble
and Payne, Chapter 3), but it was shifting economic and political concerns
from the old geopolitics of Westphalia to a new geopolitics of inter-regional
relationships as mediated by the Group of Seven (reconstituted at Naples in
1994 as the Group of Eight, adding Russia in their ranks) (Huntington, 1993).
African regionalism may eventually benefit from its remoteness in relation
to the world economy, the war against global terror, and the deficiencies of
post-colonial state-building. Ambitious regional ideas are currently under
consideration in Africa, including the promising New Partnership for
Africa’s Development (NEPAD) and the possibility of a functioning regional
parliament. Africa may yet surprise the world, neglected in so many respects,
by establishing a new identity as world order innovator and creator of a
viable regional governance structure. There is a long way to go, but even the
fashioning of such an African vision deserves notice.
A focus on strategic considerations as explanatory ignores the complex
and concealed politics of instrumentalization: who is instrumentalizing
whom in relation to what? The Westphalian model of world order assumes
Richard Falk 69

that states are, more or less, the exclusive agents of instrumentalization. In a


globalized world economy, states are themselves increasingly instrumental-
ized by concealed, external forces such as markets and profit margins, as
well as a spectrum of non-accountable networks, and the instrumentalization
of states is expressed by way of the weakening of commitment to such
foreign policy goals as human rights and environmental protection and to
the reroutinization of tasks and capabilities entrusted to the United Nations
(cf. Gamble and Payne, Chapter 3). This reorientation of policy by states is
accentuated by the weakening of organized labour as a domestic and trans-
national factor and by the discrediting of socialism (and its main operating
modes) as a normative challenge to capitalism. Such an analysis supported
an argument in favour of ‘re-situating the state’ that is, strengthening its
capacity to mediate between market drives and populist social forces (Falk,
1997). The relevance of regional actors is evident, but far from consistent or
self-evident: what is most uncertain can be phrased by reference to the
theme of instrumentalization. Formal regional structures are still being
constituted overwhelmingly by state actors as members, but to what extent
are the regional approaches being taken by states themselves as the unac-
knowledged secondary effects of their instrumentalization by the global
marketplace or in relation to global empire-building priorities? Within
regional frameworks, secondary hegemonic relations of varying sorts can be
established, as seems the case with respect to Germany in Europe, and cer-
tainly on the part of the United States in the setting of the North American
Free Trade Agreement (NAFTA), and, to a degree, in Latin America.
To what extent these trends have been disrupted by September 11 is
difficult to assess. The dominant state finds itself under attack, which has
shaped a captivatingly dramatic mission, waging all-out war against its net-
worked adversary. Security concerns take precedence, subordinating market
factors, although linkages and concealed economic motives make such gen-
eralizations quite suspect. There are, for instance, numerous conjectures
that the United States is waging the war against mega-terrorism in a manner
that promotes its strategic interests in controlling Central Asian and Middle
Eastern energy reserves.

Positive and negative regionalism

There are many dimensions of regionalism worthy of exploration and


analysis at this time: five in particular seem to illustrate the character of the
unfolding yet still inchoate post-Cold War world order, and its more recent
shift of emphasis arising from mega-terrorism. In discussing these world
order dimensions a distinction between ‘positive’ and ‘negative’ is relied
upon to assess global and regional configurations of influence and authority.
Positive refers to desired objectives such as the reduction of political violence,
the attainment of economic well-being, the promotion of human rights and
70 Regionalism and World Order

benevolent governance, the protection of ecological diversity, the safe-


guarding of health and renewable resources. Negative refers to the negation
of these goals by way of warfare, poverty, racism, ecological decay, oppression,
chaos, criminality. In the life-world positive and negative aspects are inter-
twined, and a given set of conditions associated, say, with global market
forces or authoritarian government may generate positive as well as
negative outcomes. Economic growth, even if generating a non-sustainable
consumerist ethos, may also be alleviating poverty and despair, as softer
forms of authoritarianism, while cruel to its opponents, may nevertheless be
providing effective governance at the level of the state.
This evaluation of the regional dimension of world order identifies five
patterns of interaction that seem most worthy of attention.

(1) Clarifying the main links between regionalism and the ‘containment’ of
negative globalism. Negative globalism refers here to the conjuncture of
largely non-accountable power and influence exerted by multinational
corporations, transnational banks and financial arenas, and their collab-
orators, with the ideology of consumerism and a development ethos
weighted almost entirely towards returns on capital achieved by
maximizing growth (no matter how often qualified, yet predominantly
rhetorically, by the modifier ‘sustainable’). But also, it is increasingly
important to take into account crime and terrorism of global reach. In
essence, the main regionalist tendencies are simultaneously both
reinforcing this drift towards negative globalism and creating resistance
and alternative mitigating options, including the promotion of positive
globalism (that is, the democratizing of global institutions, creating
accountability and responsiveness to more democratic social forces, and
establishing procedures for wider participation by representatives of
diverse peoples; also relevant here is the promotion of human rights,
including economic and social rights). It should be acknowledged that
the neoliberal ideology informing global market forces disseminates
constructive ideas about freedom and the rule of law, as well as destructive
notions about greed, extreme individualism, and materialism.
(2) Containing the American project to establish a non-territorial global
empire that controls the security of the planet has assumed a new sali-
ence after September 11. It is exhibited in several quite distinct contexts:
(i) pursuing counter-terrorism in essential disregard of international law
and the sovereign rights of states; (ii) waging a struggle against ‘rogue
states’, relabelled ‘axis of evil’ countries; (iii) administering by coercive
diplomacy the non-proliferation regime; and (iv) most of all, by the mili-
tarization of space under exclusive US control. This American project
draws political energy away from political regionalism, and over time
may lead to a regional geopolitics of resistance that significantly relies
on regional solidarity as more effective than nationalism in safeguarding
Richard Falk 71

the autonomy of those peoples living outside the orbit of direct


American control.
(3) Strengthening of regional frameworks to help meet the challenges being
posed by several manifestations of pathological anarchism, that is, break-
downs of order associated with political normalcy and effective patterns
of governance, leading to sustained violence that includes genocidal
outbreaks and other crimes against humanity, as well as chaotic condi-
tions producing havens for global terrorism and massive displacements
of people from their traditional habitats. A new type of pathological
anarchism, with serious implications for regionalism, arises from the
potent use of multinational networking to challenge hegemonic pat-
terns of control, especially in the Middle East. The Al Qaeda recourse to
mega-terrorism can be understood as a pathological drive to achieve
regional autonomy under extremist Islamic governance that eliminates
the American presence and condemns those governments in the region
that have collaborated with the United States and with globalization.
(4) Facilitating a renewal of positive globalism as a world order project through
the medium of enhanced regionalism. The implications of (1), (2) and (3)
are essentially negative tendencies that can, to some extent, be diminished
or redirected by certain forms of regionalization. Positive globalism con-
ceives of a governance structure for the world that is of an aspirational
character, one that promotes sustainability, human rights, development
(especially in relation to poverty and other forms of deprivation),
accountability of leaders, the rule of law, and demilitarization (reducing
warfare, arms races and sales). Given concerns about the homogenization
of identities, cultural diversity, and excessive centralization, the encour-
agement of stronger regional institutions might operate both as an
alternative to and complement of positive globalism, thereby providing
the peoples of the world with a vision of a desirable world order.
(5) Considering the normative achievements of regionalism in terms of its
contributions to the well-being of the peoples living within its framework.
This conception of positive regionalism as an end in itself is quite distinct
from the evaluation of regionalism as a constituent element in a structure
of global governance, and it has been most fully explored, of course, in
the setting of Europe, especially by the encounter between Eurocrats of
various hue and Eurosceptics, but has relevance, as well, to visions of a
better future in Africa, Latin America, and Asia (Sidjanski, 1992). Due to
the focus on the regional/global interface, as well as space constraints,
the regionalisms of Africa and Latin America are not discussed here.

Containing negative globalism via regionalism

Negative globalism refers to the adverse effects of economic and cultural


integration at the global level (Mander and Goldsmith, 1996). The integrative
72 Regionalism and World Order

dynamic is not inherently negative, but it is having a series of adverse effects,


given the current world order context. These effects include insensitivity to
human suffering, insufficient attention to ecological sustainability, tendencies
towards polarization (widening gaps between and within countries, and as
among regions) and marginalization (virtual exclusion of countries, regions,
ethnic minorities from developmental progress).
Negative globalism also instrumentalizes the state by mounting pressures
to conform to globalizing priorities that give governments little political
space (cf. Hettne, Chapter 2; Gamble and Payne, Chapter 3). States are
co-opted or subordinated, weakening impulses to regulate on behalf of the
national and global common good. In this regard the world economy, as a
totality, bears a resemblance to the early capitalist period when market
forces prevailed to the extent that labour was exploited in a variety of ways
(long hours, low wages, unsafe conditions, no job security, no protection in
old age or in the event of emergencies). At the state level social movements
helped to create a better equilibrium between state and market, corporate
and banking power being balanced to varying degrees by organized labour
and by a socialist option. Of course, the evaluation of this equilibrium was
controversial, diverse, dynamic, varying from country to country and over
time.
The state in democratic societies mediated between market and social
forces until this role was partially superseded by the imperatives of ‘competi-
tiveness’ in the wider settings of the regionalization and globalization of
economic life. This process was complex, cyclical, and contextual, reflecting
many factors, including the relative efficiency and productivity of labour
force and managerial methods, the extent to which labour protection was
entrenched, the degree to which competition for markets was being mounted
by low wage societies, the overall impact of the Soviet collapse on the socialist
option, and the shifting class and ideological composition of civil society.
Three factors underpin negative globalism.

1. The opposition of market forces to global regulatory authority designed


to mitigate the socially harmful effects of transnational patterns of
trade, investment, and finance.
2. The tension between market forces, especially the efficient use of capital
to produce short-run profits, and the provision of public goods, including
environmental protection and the elements of humane governance;
3. The assertion of security imperatives that override other world order
values, including respect for sovereign rights and efforts to achieve war
prevention.

Regionalism has not yet emerged as a counter to negative globalism


(Ohmae, 1992). On the contrary, its main drive to date has been to facilitate
more effective participation on a global level, either by protectionist policies
Richard Falk 73

or by achieving export competitiveness. The impact may again result in


some levelling down of well-being and environmental standards, at least on
an intra-regional basis. Sweden, to prepare for its participation in the EU,
has had to roll back aspects of its exemplary welfare system, reducing taxes,
cutting some services. Regionalism has helped Europe aggregate capital and
maintain technological parity with the United States and Japan, and there-
fore avoid the fate of moderate marginalization in relation to the globalized
market.
The economic achievements of regional arrangements of different sorts
are impressive in many respects, but not in relation to the containment of
negative globalism, at least not yet. Indeed, the contrary conclusion is more
illuminating, that regional formations, especially with respect to the three
main trading/investing blocs, has served to consolidate the negative feature
of global economic integration. This consolidating role has been played out
by removing economic policy from the realm of domestic politics, an aspect
of weakening the state as a mediating actor between territorial concerns,
especially of those being marginalized, and global market forces (cf. Gamble
and Payne, Chapter 3). It is confirmatory, as well, that regionalism has not
taken hold in those settings that are being most marginalized by the world
economy, and further that religious extremism in Islamic countries has
produced a partly voluntary, partly involuntary, delinking from the world
economy.

Containing empire-building

The challenge posed by the American project to establish the first empire of
global scope is an important development that cannot be adequately
addressed in this chapter (Brooks and Wohlforth, 2002; Lemann, 2002;
Wallerstein, 2002). This empire seeks dominion, but not formal territorial
authority, which will be left in the hands of states and regional organiza-
tions. The preliminary experience with this emergent empire does not yet
reveal its impact on regionalism and whether it will mean that regional
actors will remain passive supporters of this American claim to provide
security for the constructive forces on the planet, or whether it will result in
new patterns of conflict formation based, in part, on regional refusals to
subordinate their autonomy to policies directed from Washington. Much
will depend on whether the threat of mega-terrorism dissipates with time,
or intensifies, as well as whether the US economy can rebound from its
current troubles.

Mitigating pathological anarchism

Labelling internal deformations of state power as ‘pathological’ implies a


conception of normalcy in the relations of state and society that has broken
74 Regionalism and World Order

down; to associate this normalcy with the anarchy of international relations


is to stress the structural point that institutions of global governance are
very weak (Aron, 1966; Bull, 1977). Pathological anarchism refers to acute
political disorder: genocide, severe crimes against humanity, large-scale
famine, and substantial breakdowns of government. Since September 11 it
also refers to the backlash against American hegemonic intrusions upon the
Islamic world by way of mega-terrorism as actualized by a concealed
transnational network presence in 60 or more states.
In the long Westphalia period of international relations, pathological
anarchism was essentially ignored unless the strategic interests of leading
states were seriously threatened. Such threats rarely were perceived unless
the governmental actor in question embarked upon expansion at the
expense of the existing distribution of power informing world order. The
response to Nazi Germany and Stalinist Soviet Union are paradigmatic in
both respects: appeasement or, at most, containment, with respect to the
pathological behaviour, but willingness to risk everything to prevent territor-
ial expansions that seek to revise the hierarchy of relations that inform
world order. It is not that the pathological dimension is irrelevant. Indeed,
especially in relation to democratic societies, the pathological character of a
rival is relied upon to mobilize resources and commitments needed to
conduct warfare or to practise containment credibly.
The corollary point is that if the pathology does not pose external threats
it will be tolerated (Booth, 1995; see Murphy, 1996; Moore, 1998). This has
been again demonstrated in the period since the end of the Cold War in the
much discussed instances of Somalia, Bosnia, Haiti, Rwanda. Perhaps the
situation is more ambiguous: the historical memory of the Holocaust has
encouraged the sentiment of ‘never again’, particularly in Europe, and this
has generated interventionary pressures in relation to Bosnia. The CNN factor
selectively lifts the veil of ignorance from the occurrence of acute distress,
and induces public support for constructive responses. The entrenchment of
human rights in international law has eroded the sovereignty arguments
that abuses within states are of no concern externally. As a result, there have
been responses to the recent instances of pathological anarchism, but of a
half-hearted character as compared to the response mounted to reverse
Iraq’s aggression against Kuwait or to impose an international protectorate
upon Kosovo. These responses, collaborations between the United Nations
and leading states, especially the United States, have provided a measure of
relief for elements of the afflicted populations, but have not challenged the
core pathologies. What has been relied upon has been diplomacy, sanctions,
relief operations, and pinprick assertions of military power. The sum of
these efforts is less than its parts!
To the extent that responses have moved towards more serious levels of
commitment it has resulted from boundary-transcending impacts: the
prospects of a wider war in the Balkans, the outflow of refugees causing
Richard Falk 75

destabilizing effects in important state actors (United States, Germany,


France). These possible developments convert pathological anarchism into
an occasion of strategic concern (justifying large allocations of resources
and risks of loss of life), raising the stakes in the event that containment
fails. Also, in relation to refugees the alternatives of repatriation or deterrence
may both fail, leaving only the option of military intervention. Such an
interpretation of the situation in Haiti during the summer of 1994 and
Kosovo in 1999 has made some commentators write of intervention as
‘inevitable’.
Enter regionalism: both states and the United Nations have failed to
address pathological anarchism effectively. Could this failure be overcome,
in some circumstances, by the empowerment of regional institutions? Could
NATO act in the former Yugoslavia to challenge Serbian ‘aggression’, restoring
order and a unified, multi-ethnic Bosnia? Could the Organization of American
States (OAS) bring constitutional democracy to Haiti? Could the Organization
of African Unity (OAU) act in relation to Somalia, Rwanda, Burundi, Sudan
and Liberia? Kosovo provides one answer that can be interpreted in various
ways, as an evasion of Charter controls on the use of force, as an expedient
effective protection of a beleaguered population.
The major conclusion to be drawn is that regional communities have not
evolved to the point where their institutional ethos or capabilities are suffi-
cient to address pathological anarchism in a manner comparable to the
efforts made by competent and constitutionally moderate states in relation
to pathologies embedded within their own polities. States, too, are not always
effective, sometimes accommodating, containing, collaborating, and some-
times being instrumentalized from below by the pathology or even having
the pathology to capture legitimate state power (as Hitler did in Germany,
1933). Should regional actors be encouraged to take on these ordering tasks,
especially the protection of those most victimized by pathological anarch-
ism, as part of the mixture of a commitment to implement human rights
and to maintain region peace and justice? The effort to prevent weak states
from being used as territorial havens for terrorist networks creates major
strategic incentives to establish viable states that can exert effective control
over their sovereign space.
The dilemma posed here seems quite fundamental: to be effective and
autonomous (that is, non-instrumentalized), regional institutions would
have to become cohesive and capable of commanding loyalty, thereby com-
ing to resemble in certain respects a state of Westphalian lineage, but such
an evolution would seem likely on a global level to stimulate inter-regional
conflict among regions of greatly different resource bases and civilizational
identities, making it more credible that ‘a clash of civilizations’ would
indeed ensue as the sequel to the Cold War. This course of development
seems less likely in the immediate future, given the degree of global mobil-
ization around a revised global security agenda, this time pitting a coalition
76 Regionalism and World Order

of states against a dispersed non-territorial network seeking to establish its


own radical vision of global governance.

Promoting positive globalism

There are two intersecting traditions at work: first, the anxiety that effective
global governance cannot avoid encroachments on human freedom unless
it avoids centralism; a regionalized world order is one approach to reconciling
the quest for global governance with a concern for constitutional equilib-
rium, and to a lesser extent with the preservation of cultural diversity
(Hutchins et al., 1948). The overriding goals in this outlook are so ambitious –
transforming statism, ignoring globalization – in relation to the flow of events
and horizons of aspiration, that little serious evolution of this possibility has
been under consideration in academic circles (cf. Hettne, Chapter 2; Hveem,
Chapter 5). A more moderate expression of this view is somewhat more
influential in the form of an advocacy of ‘subsidiarity’ via regional institutions
as a way of allocating downward from the United Nations, particularly with
respect to security issues other than mega-terrorism, and thus in the context
of delimiting the UN role. Such an approach borrows from the European
experience, which evidently borrowed from a Vatican doctrinal tradition.
Such an approach is meaningful, of course, only to the extent that robust
regional institutions exist, which is not the case, with the possible exception
of Europe, and in extremely limited respects, Central and South America
and Africa (Knight, 1994).
The second approach here is to view regional institutions as complementary
and subordinate tools of global governance, being shaped within the United
Nations, contributing in various settings to either effectiveness or legitimacy,
or some combination (Knight, 1994). The UN Charter in Chapter VIII seems
to envisage such a relationship. Since effective regional governance has so
often in international history meant interventionary diplomacy by a hege-
monic state, and thus geopolitics, it has been viewed with suspicion by
those disposed towards more law-governed modes of governance. The
revival of practice and advocacy of spheres of influence is suggestive of a
post-Cold War pattern that acknowledges the failures of the United Nations
in the setting of pathological anarchism, but it can hardly be properly iden-
tified as a variant of ‘positive globalism’. Conservatives give some credibility
to the view that international institutions add elements of constitutional
moderation to traditional modes of interventionism and discretionary
geopolitics, conceiving of recourse to the United Nations or a regional actor
as confusing, hypocritical, and superfluous from the perspectives of a realist
worldview (Krauthammer, 1991).
At this point, it is difficult to credit regionalism with being more than an
occasional instrument for the assertion of hegemonic control that depending
on circumstances can be viewed as either legitimated by collective procedures
Richard Falk 77

or not. The US intervention in Panama in 1989 was carried out despite the
refusal to accord it legitimacy at either the regional or United Nations level,
whereas a protective intervention in Haiti enjoyed both regional and UN
blessings. There is some difference, yet in both contexts intervention is
essentially a hegemonic initiative (shaped in Washington, with respect to
time, goals, modalities, battlefield control).
Regionalism in relation to the emergence of positive globalism remains a
latent potentiality. The Charter gives ample space for complementary
regional roles in peacekeeping settings, and does in Article 52(3) express a
favourable disposition towards resolution of disputes at a regional level,
thereby seeming to endorse subsidiarity. Again, context matters: Castro’s
Cuba is under far more intense hegemonic pressures as a regional pariah
than it is in the UN setting. It would seem that the virtues of regionalism in
relation to positive globalism are, at present, mainly speculative. Its more
serious relevance would arise as a derivation from the emergence of positive
globalism, not currently in the offing, and especially backgrounded in light
of the geopolitical response to September 11.

Promoting positive regionalism

Regionalism has achieved positive results in relation to specified world order


values in several substantive sectors and various geographic settings, most
significantly, of course, in Europe, but also in Asia/Pacific, Latin America,
Africa and the Middle East (Hettne, 1994, 2002a). The most impressive of
these achievements involve: (i) promotion of human rights, including
revolutionary sovereignty-eroding procedures, as embodied in the European
framework, and to a lesser extent within the Inter-American setting (Held,
1989: 212–42); (ii) mitigation and resolution of conflicts via diplomacy,
mediation, and regional linkages; (iii) promotion of environmentalism; (iv)
innovations in transnational cooperation and institutionalization; and (v)
experimentation by way of the Maastricht Treaty with innovative extensions
of political identity by way of the conferral of European citizenship (Clarke,
1994; van Steenbergen, 1994).
European regionalism has demonstrated that it is possible to extend the
rule of law beyond the state, and often promote further human rights gains
within generally democratic states by asserting grievances at a regional level.
This has been impressively demonstrated with reference to the extension of
gay and lesbian rights, which provides a model for other concerns, including
the protection of resident refugees, access to asylum, and the treatment of
foreigners or strangers generally. There is a school of Eurocratic thought,
most prominently associated with Jacques Delors, that further economic
integration will succeed only if accompanied by parallel moves to strengthen
the political facets of the EU, and that such a momentum needs to be
78 Regionalism and World Order

maintained to consolidate the economic results in terms of increased trade


and investment so far achieved. Again, grassroot dissatisfactions with the
euro and the general troubles of the world economy cast a dark cloud over
prospects for any deepening of the European vision at this point.
Perhaps, most significantly, regionalism has protected the peoples of
Europe against deteriorating standards of living, and the prospects of gradual
marginalization in relation to the American project of global empire. This
protection has been somewhat controversial because of its tendency to
build pressure by way of competitiveness to conform to the requirements
imposed by negative globalism. The latter has contributed both to high
levels of unemployment and to static, or even falling, real wage levels in
Europe and North America. An assessment is not a simple matter. To the
degree that regionalism has been instrumentalized by negative globalism (as
argued above), then it forms part of an overall global structure of dominance
that is leading to acute marginalization for certain nations and regions,
sectors deemed inefficient and uninviting if considered either as producers
or consumers (cf. Gamble and Payne, Chapter 3). The geographic distribution
has some North/South features, but the burdens of marginalization are not
so neatly configured, given the rise of South and East Asia, and parts of
South America. This disregard of marginalization is accentuated by the ideo-
logical consensus in support of neoliberal economism in elite circles, and
reinforced by the abandonment of socialist and welfare-oriented perspec-
tives by even the leading Social Democratic parties in Europe. There has
been some retreat in recent years from these rigid ideological interpretations
of globalization, and more realization, even in Washington, that successful
global governance calls for attention and resources devoted to states and
regions previously written off as irrelevant. This global integrationist per-
spective has been further strengthened by the incentive to avoid converting
impoverished populations and countries into havens for political extremism
and terrorism.
With respect to economic regionalization, the most important recent steps
have involved Europe, North America, and Asia/Pacific. The cumulative
impact on peoples within and outside these more integrated trading blocs
is, as yet, conjectural and intensely contested. Whether the characterization
‘positive regionalism’ is at all appropriate cannot be determined at this time
until more evidence on effects has been gathered. A worst case assessment
would suggest that regionalism is serving as a cover for the re-entrenchment
of relations of privilege and domination that had been challenged during the
revolt against colonialism. A best case scenario would attribute unevenness
in benefits and burdens to the short run, with a more equitable, sustainable,
and democratic global economic order emerging in responses to grassroots
and other challenges mounted against negative globalism, which surfaced
in 1999 and subsequently in the form of a dynamic anti-globalization
movement spearheaded by transnational social forces intent on establishing
Richard Falk 79

a global civil society, a visionary alternative to either global empire or


civilizational enclaves.
In the Asia/Pacific region, the internal dimension of regionalism is to take
early, mainly informal and ad hoc steps towards economic cooperation and
coordination, viewing especially ASEAN as possessing a potential for expan-
sion and further institutionalization in the post-Cold War era. These steps
are reinforced by a new Asian cultural assertiveness, which moves towards
the affirmation of a regional identity but also represents a deepening of the
decolonization process by its implicit repudiation of Eurocentricism.
In this regard, Asian/Pacific regionalism resists any renewal of Western
hegemonic projects, and helps explain Asian unity with respect to opposing
doctrines of humanitarian intervention to correct several abuses of human
rights or to remove military rulers from power. As such, Asian/Pacific region-
alism, even more than its European counterpart, may be moving towards
limiting the Western, especially the US role, thereby encouraging a defensive
dimension of regionalism. This dynamic of resistance has encountered major
obstacles since the Asian Economic Crisis and the initiation of the American
war against global terror, which includes interventionary claims directed at
several key Asian countries.

A concluding note

More particularistic inquiries may help to clarify the impact of regionalism


on world order values, especially in light of new global economic troubles
and the return of security concerns to the top of the global policy agenda. This
chapter has tried to conceptualize several main contexts in which regionalism
has seemed dynamic in this post-Cold War period, taking especial account
of pre-September 11 hegemonic passivity on a global level, of the disappoint-
ing capacity of the United Nations to provide a less hegemonic, yet still
effective, world order, and of the overbearing reality of globalization with
respect to markets, money, and information. Little ground for optimism has
been found with respect to regionalism as either a counterhegemonic
democratizing influence or as a source of a new kind of benign hegemonic
order.
The post-September 11 modification of this analysis relates to the possi-
bility that the United States, in its super-hegemonic role, may promote
regionalism in sectors of international society (for example, Africa and Latin
America) with weak states unable to prevent their sovereign space being
used as base areas for global terrorist activities. Hettne (2002a) has theorized
this externally promoted regionalism under the rubric of ‘hegemonic
regionalism’ (cf. Hveem, Chapter 5).
From a world order perspective one crucial contribution of regionalism is
to help create a new equilibrium in politics that balances the protection of
the vulnerable and the interests of humanity as a whole (including future
80 Regionalism and World Order

generations) against the integrative, technological dynamic associated with


globalism. One kind of balance is being promoted by transnational social
forces connected with human rights and the environment, but regionalism
could be another. Both phenomena are, in part, reactions to the displace-
ment of the state, from without and within, and the decline of sovereign
territorial space as a domain of unconditional political control. Regionalism,
if democratically conditioned, might yet provide, at least for some parts of
the whole, a world order compromise between statism and globalism that
has indispensable benefits for the circumstances of humanity, as well as
some new dangers (cf. Hettne, Chapter 2; Hveem, Chapter 5).
A recurrent theme of post-modern thought is the stress upon undecidedness
(cf. Bøås, Marchand and Shaw, Chapter 11). The rational grasp of reality
does not resolve difficult issues of choice. The cynical view is that such a
circumstance ensures that interests will prevail, and there is support for
such a reading of the times, particularly given the rise and spread of crime,
even the danger of the gangster-coopted state. A more hopeful view is that
the tendencies towards democratization and human rights can be focused
in the years ahead on the menaces of negative globalism and pathological
anarchism, and that regional arenas will be important as sites of struggle,
and as exemplification of the play of opposed forces.
These lines of speculation have been altered by the faltering of the world
economy, as especially highlighted by the revelations associated with Enron
Capitalism demonstrating that the rosy image of the American economic
juggernaut was a gigantic fabrication of misleading accounting practices.
Even more disconcerting has been the American recourse to a war against
mega-terrorism that has been generalized to include all non-state move-
ments that are engaged in armed struggle, seemingly a war without end that
arrays a superpower embodying modernity on one side and the primitive
techniques of resistance given superpower potency by a concealed net-
worked organizational reality on the other. The resulting encounter can be
understood as the first post-modern world war, that is, with non-state actors
as strategic adversaries of established statist geopolitics, which were also
under pressure from the rise of transnational market and civil society forces.
How regionalism fits into this context is not likely to be understood for at
least another decade.
5
The Regional Project in Global
Governance*
Helge Hveem

The problem

The world is in need of governance. Global institutions, notably the Inter-


national Monetary Fund (IMF) and the World Trade Organization (WTO),
are not delivering on the promises made when they offered themselves as
the anchor of global governance and, together with the World Bank,
claimed hegemony over the agenda of economic and development politics.
They still retain a considerable role, but they do not suffice. In this situation
‘the regional project’ – to use international regions as a layer of global gov-
ernance – is becoming increasingly relevant.
The chapter looks at the international region as a political project from the
perspective of international political economy. It sees the project as organ-
ized by political institutions that are influenced by support or contest-
ations from society (cf. Hettne, Chapter 2). It assumes in other words that it
is only when the top-down approach is largely reconciled with a bottom-up
approach that the project becomes really viable. The project is only viable if
it is legitimized.
Generally speaking governance is establishment and operation of a set of
rules of conduct that define practices, assign roles and guide interaction
when grappling with collective problems (Young, 1994: 315). Collective
governance implies sharing responsibility both for making decisions and for
implementing them. This applies even if the two functions are separated,
that is if responsibility for either of these functions is delegated from one
level of collective action to another.

* This chapter draws heavily on two previous publications by the author (Hveem,
2000a, b). It restates and updates the main arguments presented in those former
contributions, and also adds the rapid growth in the network of inter-regional rela-
tionships, some of which are being institutionalized, and an emphasis on them as a
new tool of global governance (also see Hveem, 2002). Harald Feed and Gisle Torheim
have contributed assistance in collecting information for this part of the chapter.

81
82 The Regional Project in Global Governance

The International Commission on Global Governance (ICGG) pointed to


the flaws and inadequacies of existing institutions in resolving conflicts
peacefully and democratically, and in cooperating in managing natural
resources and the redistribution of welfare (ICGG, 1995). Most importantly
the Commission viewed the Westphalian system based on sovereign nation-
states as being incapable of managing international affairs. It identified a
need to ‘weave a tighter fabric of international norms, expanding the rule of
law world-wide and enabling citizens to exert their democratic influence on
global processes’ (ICGG, 1995: xiv). Within this perspective, the Commission
argued that the ‘potential of regional cooperation has in many ways been
insufficiently exploited in most parts of the world’ (ICGG, 1995: 287).
This direct political challenge to both Westphalian thinking and globalism
was followed up more recently in an open letter published by the then Presi-
dent of the European Council, the Belgian Prime Minister Guy Verhofstadt,
just after September 11. He advocated that the ‘G8 of the rich countries . . . be
replaced by a G8 of existing regional partnerships . . . where the South is
given an important and deserved place at the table to ensure that the glob-
alisation of the economy is headed in the right direction’.1 The call appears
to have been echoed by the president of Brazil, Inácio Lula da Silva, when as
newly elected he advocated a much developed Mercosur based on the EU
model as a response to foreign pressures on the Southern region.2
The chapter adresses two interrelated questions. First, is regional cooper-
ation the answer to the problem of collective action at the international
level? Second, what is the potential of the network of inter-regional agreements
which appears to be evolving in the first part of the twenty-first century and
which Mr Verhofstadt advocated?3

The argument

Institutionalized cooperation at the level of international regions is initiated


for a variety of reasons. Both classical integration theory and more recent
perspectives on regionalization emphasize the intentional character of
cooperation. The intention may be to increase collective welfare, improve
the environment, create or defend a collective identity, offer conflict reso-
lution opportunities and/or security for participants against third parties,
strengthen the bargaining position of members vis-à-vis third parties, or to
remunerate some participants with economic rent or increased political
power. But such goals may also be attained by other schemes. Moreover sev-
eral of the major problems facing today’s world, such as the possibility of
climate change, are truly global in character. So why do actors want regional
institutions to cope with the challenges they face?
The question appears particularly relevant in the areas of economic glob-
alization and environment policy. To neoclassical economists worldwide
free trade is the first-best solution because it maximizes economic welfare;
Helge Hveem 83

regional arrangements are second-best (Frankel, 1998). Why is it then that


during the present globalization era regional economic arrangements,
mostly free-trade areas (FTAs), have grown rapidly in number, scope and
domain? Is it rent-seeking through protectionism that is the intention? Or is it,
rather, the opposite, trade creation rather than trade diversion, that is intended
and which for various reasons actors decide has to be organized regionally?
And if the latter is the case could that be because global arrangements are
difficult to organize, that is, second-best institutionally, while regional ones
trump global institutions in this respect, but also make it possible for members
to realize some other intentions?
Collective global institutions already play an important role in providing
incentives for improved environmental protection by individuals and firms
(Kay and Jacobson, 1983; Keohane et al., 1993; Hanf and Underdal, 2000).
Also the role of global institutions in setting rules and standards such as in
the human rights and transports areas is undoubted. But beyond these
examples empirical evidence appears less conclusive.
I argue that the strength of regional projects depends on whether they are
able to establish clear and widely accepted perceptions that they enjoy a
comparative advantage in resolving international governance problems. I shall
refer to such advantage as comparative political advantage. If such an
advantage exists, it is for reasons having to do with efficacy, with identity,
but above all with legitimacy. A governance institution is efficacious if it
manages to create and maintain collective action at comparatively low cost.
It is legitimate if the rules it sets for behaviour and for making and imple-
menting decisions and the way it sets and monitors those rules are voluntarily
accepted by (most) participants. The regional project becomes viable primarily
to the extent it is embedded in the political systems of its constituent members
(cf. Coleman and Underhill, 1998). As for collective identity it is not as
much an independent cause as it is an important precondition for the insti-
tutions concerned to function efficaciously and for these institutions to be
seen as legitimate (Grugel and Hout, 1999).

Analytical perspective

For analytical purposes a distinction should be made between ‘regionalism’


and ‘regionalization’. Regionalism refers to a programme, an ideology, to a
situation where there exists a clear idea of a region, a set of goals and values
associated with a specific project that an identifiable group of actors wish to
realize. Regionalization, on the other hand, is the actual process of increasing
exchange, contact and coordination and so on within a given region.
Regionalization may obviously result from regionalism, but not necessarily,
and not only so. Regionalism may fail to produce the results it intends.
Moreover regionalization – as increased emphasis on organizing cross-border
transactions within a region – may be intended not as an end, but as a means
84 The Regional Project in Global Governance

to an end. The end may be the global market and the region may serve as
a stepping-stone to it, as an adjustment to and preparation for globalization.
In yet other cases regionalization may be intended neither as an end nor as
a stepping-stone, but simply be a way of hedging (Hveem, 2000a).
Many people know little about regions, or to what region they actually
belong. When collective action beyond the state is seen as necessary, the
regional project may also have to compete with bilateral strategies in being
considered efficacious. In fact bilateralism, which was the dominant trend
in the 1980s, has been resurging recently.4 However, regional projects may
trump bilateral ones on two scores: the latter is mostly an instrument that
only the major powers may make use of; and secondly, global institutions
such as the WTO see bilateralism as more problematic, less legimate than is
the case with a regional project.
The analysis appears to confront two types of problems at the outset. First,
what constitutes a comparative political advantage is controversial. Both
analysts and practitioners apply different criteria. Neoclassical economics
discusses regional cooperation as failures or successes according to whether
or not it exploits comparative economic advantage and whether or not it
promotes efficacy in allocating resources. This school looks upon regional
projects with suspicion, as something that tends to be ‘closing’ towards out-
siders – that is, as obstacles to globalized markets (Bhagwati, 1993). Other
trade economists take a more pragmatic view and see free-trade areas (FTAs)
as potentially both ‘closing’ and ‘opening’ to global markets (Frankel, 1998).
For political economy and political science the issue is not whether
regional projects appear as ‘closed’ or ‘open’ in an economic interpretation,
but whether and how regional institutions contribute to a (comparatively)
just allocation of resources (cf. Gamble and Payne, Chapter 3). The relation-
ship between the economy and the society becomes a redistributive issue.
Realism in political science, echoed by neomercantilism in political econ-
omy (Gilpin, 1987), deals with economic issues and the welfare factor in
particular by viewing actors as defensive positionalists. They will focus on
what gains other members of the regional project make as compared to their
own personal gains, and they will resent it if other members gain in relative
terms even when everybody gains in absolute terms. Pareto-optimal out-
comes will not suffice, nor will Rawls’s ‘veil of ignorance’ fully deal with the
redistribution issue. There has to be some intervention by political institu-
tions. This view may even focus on the developmental issue: that is, investigate
which institutions promote improvement of productive forces and compe-
tence-building and make development ecologically sustainable (Tussie, 2000).
It is inclined to accept a conditionally or moderately ‘open’ regional project
if the project contributes to these ends. Finally some would also focus on
security aspects of regional cooperation, either in the narrow meaning of
military security or in the broader sense of comprehensive security (cf. Buzan,
Chapter 8).
Helge Hveem 85

But is the regional project actually able to perform governance in the era of
globalization? The answer differs across regions and across sectors. Economic
globalization may appear to make the nation-state obsolete although a
strong case has been made it is not (Weiss, 1998; Hveem and Nordhaug,
2002). There is thus a widespread perception that, except in the case of the
superpower or big powers, the nation-state becomes too ‘small’ and weak to
govern foreign economic relations. Regions therefore become the optimal
alternative, partly because they are placed in the intersection between global
and nation-state institutions that attempt to cope with these processes
(cf. Hettne, Chapter 2). The deepening and widening of the European
Community as it created the European Union is believed to be, in part, a
response to the globalization process and to increasing global competition.

Hegemonic, international and transnational projects

Throughout history hegemonic regional projects have been dominant. The


legitimacy of the project has, in other words, not been a primary concern.
Legitimacy concerns were increasingly mobilized within projects that
resulted from pure and simple imperial ordering of the world. Imperial
regions were contested in the decolonization process, but the Cold War led
many parties to accept hegemonic regionalization of a less openly or informal
imperial type. State leaders could thus legitimize hegemonic regional
projects if a credible enemy image was present, or could be constructed.
Security concerns at the same time imposed strict rules as to with whom
members of security pacts could associate. The end of the Cold war not only
led to the immediate breakdown of the Soviet Union and hence the Council
for Mutual Economic Assistance (CMEA) and the Warsaw Pact, three imperial
systems, and to pressure on the North Atlantic Treaty Organization (NATO)
to change. It also opened up for slacker restrictions on the choice of domain,
that is the geographical space for choosing associates.
During decolonization and the post-colonial period, lack of institutional
legitimacy became apparent. It led to a row of regional projects in the
South, but also to the dissolution of a hegemonic project in East Africa. The
historical experience thus is mixed. In some cases considerations of security,
welfare, or even collective identity led the weaker parties rather voluntarily
to associate with hegemonic powers, Francophone West Africa being one
example. A vital issue was and is still what actors and groups associate with
what kind of intention. Hegemonic regional projects have thus not come to
an end with the end of colonies and the Cold War, but with democracy and
greater transparency they face more contestation than they already did in
the past (Hveem, 1973, 2000a; Hurrell, 1995). And they face alternative
types of regional projects.
One is international regionalization where the decision-making is based
on inter-state relations and on the multilateral principles of one-member,
86 The Regional Project in Global Governance

one-vote and of reaching consensus. Another is transnational regionalization.


It falls into two sub-categories: one is corporate industrial organization, the
other societal non-state initiative and decentralized patterns of influence.
What is now referred to as ‘new regionalism’ is often associated with that
latter trend.5 The EU represents a form that both incorporates and tran-
scends elements of all these types. At the same time it represents what is still
the only real example of supranational regionalization.
A broad overview of developments in regional projects worldwide would
identify a tendency to move from hegemonic to the alternative regional
projects. But the hegemonic regional project is far from dead. Before some
possible reasons for such a shift are reviewed, the case for hegemonic
regionalization should therefore be addressed.6
Hegemonic regionalization. The positive representation of the case for hege-
monic regionalization is most prominently found in realism and its close
institutionalist ally, hegemonic stability theory. It is an argument in favour
of a clear leadership structure as a vital factor in regional projects. Leadership
is most often associated with a major nation-state. If leadership is uncertain,
not to mention contested, that creates instability and the project becomes
non-viable. At the same time a hegemonic project would normally be aware
of the threat to leadership in the structural imbalance or ‘democratic deficit’
that it represents. It will therefore focus on security more than other goals,
or at least as one major goal, because it has the potential of being considered
a collective good. To cope with the distributive issue posed by defensive
positionalists, liberal institutionalists argue that hegemonic stability is con-
ditional on the hegemon being willing to meet a disproportionately large
share of the costs of carrying the regional project and finance and thus the
redistribution of gains and losses among participants in order to have them
support the project (Kindleberger, 1973). The hegemon needs to be deliber-
ately benign towards other members of the project.
What is reality? Is India’s position in the South Asian Association for
Regional Cooperation (SAARC) an asset or a hindrance to its strengthening
and deepening? How about the United States in the North American Free
Trade Agreement (NAFTA), Brazil in the case of Mercosur, and South Africa
in the case of the Southern African Development Community (SADC)? In
one interpretation of the EU’s relative stability and success a major cause is
believed to be the Franco-German pact – the closest one comes to political
hegemony in the case of the European Union. But to smaller members the
pact between the two – not to speak of the situation were the United Kingdom
to side with them – may be seen as a power position that goes beyond the
decision-making rules of the community of states. In practice there is often
widespread perception, or fear, that the hegemon is malign and exploits
power in its own favour (Strange, 1987). This perception is represented in
critical theories of regionalization that portray transnational corporations as
hegemons. These theories assume a conflict of interest between the
Helge Hveem 87

hegemon’s strategy for regionalization and that of national development


intentions.
Non-hegemonic projects. When regionalization among nation-states is non-
hegemonic it is normally the international regionalization type. It represents a
state-led and inter-state project that assumes some form and degree of multi-
lateral decision-making style. It is based on members sharing leadership
and on the result of decision-making processes being negotiated, not dic-
tated outcomes. It is broadly covered by the intergovernmentalist class of
integration theory according to which nation-state authority retains power
over cooperative processes and policies at the regional level (Moravcsik,
1993; Hurrell, 1995). There may be a supranational aspect in the ideology or
institutions of the project concerned. But – as the argument goes with
respect to the EU – intergovernmentalist aspects of governance trump supra-
national ones.
This type of regional project is the one that is most often found in the
decolonization period and in the post-Cold War 1990s. The simple reason
for that will be developed below: it comes closer than either hegemonic or
supranational orders to preserving state autonomy and is thus seen as most
legitimate by most political agents.
Transnational regionalization falls into two sub-categories – corporate and
societal. Their common denominator is that they are both carried by non-
state actors (cf. Bøås, Marchand and Shaw, Chapter 11). But could they
have something in common which would make them favour a regional
project? The answer is not obvious. On the one hand the two diverge on
what is their main intention, the corporate actors being typically concerned
with creating wealth through growth, the societal actors with identity and
redistribution of wealth. This divergence often results in open conflict.
However, they may converge on other issues, such as some aspects of envir-
onmental protection. But do they converge on supporting regional
projects?
The inclination of liberal and above all neoliberal theories is to conclude
negatively: corporate actors are globalists and prefer globalization for prag-
matic reasons, one being the fairest competitive market conditions (Milner,
1988). For corporations with a global strategy this rationalist interpretation
may appear correct. But there are few corporate actors with a truly global
strategy (Rugman, 2002). Most need the stable environment offered by public
governance in order to remain efficient. They pursue a flexible strategy with
respect to organizing their activities to cope with technological change, and
with regional differences in identity (consumer preferences) and political
order, including the existence of FTAs or customs unions. Since they now
control directly or indirectly some two-thirds of total world cross-border
trade and one-third directly as intra-firm transfers they greatly influence
location and trade policies through flexible strategy and organization. They
may hedge their options with respect to global or regional or for that matter
88 The Regional Project in Global Governance

bilateral arrangements. And they may, if they dominate a sector (monopolistic


market power) or cooperate closely (cartel), assume a position that resembles
that of a hegemonic state.
In the real world several of these types of motives may be found to influ-
ence regional cooperation processes simultaneously or sequentially. Ten-
dencies towards corporate regionalization would normally be motivated by
the maximization of utility, for instance economic growth or increasing
rents. An underlying assumption which is normally found behind such
motivation is that increasing division of labour and trade among a group of
economies in a region enhances growth (cf. Mistry, Chapter 7). One specific
motive may be to reduce transaction costs which represent barriers to
exchange, such as tariffs or non-tariff barriers, bureaucratic-administrative
procedures, and the like. This creates an ‘enlarged home market’. The fact
that intra-industry trade has been a most dynamic factor in the evolution of
the European common market may be considered a proof that cooperative
regionalization works for the economy and induces corporate regionaliza-
tion as well.
The utility-maximizing motivation may also be based on non-economic,
mainly ecological goals, promoted particularly by societal regionalization.
The purpose may be to combat desertification, regulate commons (river
basins) or enhance environmental protection for the collective good. The
regional scope of this issue-area relates basically to two interrelated dimen-
sions. The first is the fact that a certain number of environmental problems
are shared at the regional level. This is the case when ecological space does
not correspond to state authority, nor is it global in reach. Secondly,
changes in ecological space that has a regional character affect the state sys-
tem directly; an example is when desertification results in migration such as
has been the case in Sahel.
As was pointed out above, a second type of motive or goal is collective
security. In the past many regional cooperation agreements have been
driven, in some cases even initiated, by this type of motive; three among
several examples are the European Coal and Steel Community (ECSC), the
Southern African Development Coordination Conference (SADCC) and
the Association of Southeast Asian Nations (ASEAN). In more recent times the
security motivation has not necessarily been associated with military security,
but been based on a comprehensive security concept (cf. Dokken, 1997;
Buzan, Chapter 8). Destabilization of neighbouring countries caused by
violent domestic conflict has been a security issue in Indochina and Central
America and more recently in Africa; the side-effects on the region of the
conflicts in Liberia, the Democratic Republic of Congo (DRC) and Rwanda
are cases in point. Security-induced motivation is often associated with
identity or may mobilize such other types of motivation in the process.
Again the evolution of European integration (beyond the ECSC) and of
ASEAN are illustrations.
Helge Hveem 89

The third category, creation or defence of collective identity, has been


underestimated in the largely rationalist integration theory (Higgott, 1998b;
cf. Bøås, Marchand and Shaw, Chapter 11). Cooperation may result out of a
manifest need to establish, or defend, what is perceived as the fundamental
cultural basis, socio-cultural distinctness or the particular institutions char-
acteristic of a region. Even rationalists include the identity factor in
accounting for cooperative behaviour, or as a precondition for cooperation.
One example is the Monnet–Schuman ‘idea of Europe’ which was accepted
by Realpolitik leaders like Adenauer and de Gaulle because it represented a
radical breach with the perception of Europe as an eternal war zone.
Another example, and a different category of rationalist integration theory,
is the theory of a ‘regional awareness’ found in the communication perspec-
tive (Deutsch et al., 1957). In this perspective inter-societal relations shaped
by a sense of community, mutual sympathy, a feeling of ‘we-ness’ and trust
constitute the basis for regional integration and cooperation. Reflectivist
theory is basically arguing that cooperation results from learning (Haas,
1990) and that this factor played a large role in the formation of the EU
(Wallace and Wallace, 1996). In recent years constructivism has promoted
the identity factor to the forefront.
There is no theoretical agreement that one in particular among these
motives is typically associated with one particular decision-making style –
federalism, neofunctionalism or intergovernmentalism. Under hegemonic
regionalization the issue hardly applies; here the hegemon rules. For the
other categories the issue is whether the regional project is dependent on a
societal demand or a political supply mechanism, or on both, to be sustained.
The controversy in the integration literature has mostly been over which
decision-making style is most typically associated with the utility motive
which in that literature is assumed to guide most projects of regional eco-
nomic cooperation. The ‘new regionalism’ has not been the first to argue
that successful regional integration presupposes democracy: a bottom-up
process whereby the initiative to cooperate comes from economic agents or
societal groups who want certain functions to be taken care of by regional
institutions. In fact bottom-up protagonists sometimes request a top-down
decision-making style; an example is environment policy, where environ-
mentalists lobby for binding environment protection clauses in the EU and
NAFTA.
Agency is given prominence over structure in this contribution, but the
two obviously mutually influence and constitute each other (see Hveem,
2000b). Among structural factors that matter is a relatively high rate of
exchange. It represents a situation where the economies and societies involved
are mutually dependent on each other across several sectors and issue-areas;
they are embedded in complex interdependence (Keohane and Nye, 1977).
Not only investments and trade, but exchange of transboundary pollution
or the sharing of natural resources may be part of an interdependence
90 The Regional Project in Global Governance

structure. When two or more entities find themselves in such a structure, they
may or will discover that their own behaviour is being affected by that of
the other(s), and that they themselves have the capability to affect the
other(s). The structure offers an influence reciprocity and reduces incentives
to free-ride. This also applies if all parties contribute to air pollution.
Regional cooperation may thus result out of a mutual understanding that all
parties are better served by coordinating action than by acting unilaterally.
But this is obviously not always the case. Consider the cases of pollution
control and sharing of a river. If one neighbouring party pollutes and the
other does not, the former may have no incentive to coordinate with the
latter. Similarly if one party controls the source of an international river –
the ‘upstream country’ – it is in a different and stronger position than the
‘downstream country’. This structural inequality is said to be prominent in
such cases as the Eufrat-Tigris and Jordan, not to mention Rio de la Plata
(Tussie, 2000). It is probably what caused Egypt unilaterally to declare that it
would go to war against any party that would interfere with the waterflows
of the Nile. Conflicts over waterways are widespread and latent (Clarke,
1991), but it is in fact the presence of conflicts which may push parties
towards cooperation. Cooperation is not necessary where harmony prevails.
Complex interdependence works when parties may swap their respective
bargaining positions in two or more sectors, or when successful cooperation
in one sector spills over to another or more sectors. But it may also fail to
produce integrative outcomes. Neofunctionalism’s assumption of a spill-over
mechanism, perhaps a little too mechanistic as it is, is mirrored by a ‘spill-back’
mechanism: if integration fails in one sector, failure may spill back into
another sector and pull it into non-cooperation. The problems in ASEAN
and in Mercosur after their respective financial crises may be a case in point.
Socio-economic networks and Deutsch’s community represent varieties of
societal regionalization where parties are motivated by utility or common
identity (even ethnicity). They may be a most efficient glue in regionaliza-
tion. Illustrations are found in East Asian ‘growth triangles’ (Thant et al.,
1994) but also in Africa (Igué and Soulé, 1992; Meagher, 1997; Lavergne,
1997). In the latter case, boundaries, in particular the existence of differ-
ences in tariff levels and structures between contagious states, stimulate
trade between them and lead to growth and development of the participating
agents and social groups. This trade activity – usually referred to as ‘informal’,
‘secret’, ‘parallel’ or even ‘smuggling’ – is outside the control of the state.
It represents a ‘trans-state regionalism’ that challenges, and sometimes
breaks down, state authority (Bach, 1997, 1999; Bøås, Marchand and Shaw,
Chapter 11). When transboundary trade issues combine with security and/or
environment problems, however, there are indications that the state becomes
more actively involved and also more influential in directing the socio-
economic processes across boundaries. In the East Asian case it is evident that
the state takes a role in trans-state relations, sometimes even pushing them.
Helge Hveem 91

It is assumed that hegemonic regional projects usually are only legitimate


when collective security is at stake. The most useful research strategy for
assessing the comparative political advantage of the region compared to
that of global and national governance is therefore to explore where and
how international and transnational processes interact in support of the
project.

The comparative political advantage of regional governance

The ‘moderate’ version of constructivist theory argues against the Realpolitik


belief that the international system is inherently anarchic (Wendt, 1992).
Another version pushes the post-modernist rejection of the (nation-)state as
a primary actor in the international system further, adding a perspective on the
nation-state that emphasizes its internal social and discursive heterogeneity.
It suggests that regionalism is embodied in interpersonal discourses across
societies and emphasizes the resulting intersubjective meaning that the idea of
region has for people. Anderson’s (1983) concept of ‘an imagined community’
partly represents this category (cf. Neumann, Chapter 9). Some authors of a
post-modernist conviction also make a strong point about the representa-
tion of ‘we’ and ‘they’ – or ‘friend’ and ‘foe’ – as an important mechanism
not only for constituting foreign policy (Shapiro, 1987) but for constructing
regional identity and cohesion in, for instance, East Asia (Sum, 1996).
International and domestic factors interact and influence each other
mutually in shaping the outcome of the issue (Evans et al., 1993; Hveem,
1994, 1997). Authors who advocate an interactive multilevel model, however,
still have different views on the relative importance of domestic as com-
pared to international factors, and on agency as compared to structure.
While domestic politics are practically always influential and sometimes
decisive, some emphasize the role of regional projects in domestic politics,
others the role of regional projects in the global system including relations
between hegemonic power and other actors. Let us confront these perspectives
as they are represented in international and transnational regionalization.
When regionalization appears as the result of domestic political processes –
when it pushes the regional project ‘from the nation up’ – it results from
either of two mechanisms. One is complex interdependence, primarily a fact
among neighbours and between open democratic societies; it invites bargaining
beyond the nation-state in order to win battles within it. Secondly several
issue-areas of rising importance, such as air and sea pollution, call for – following
the subsidiarity principle – for collective action at the level above the nation-state.
In this perspective the focus is on the character of state institutions, the
strength of civil society and the nature of state–society relations. They are
crucial factors not only for the efficiency, but for the legitimacy of the
regional integration project (Katzenstein, 1996). The environment protocol
of NAFTA, and the emphasis on environmental issues in the EU, notably in
92 The Regional Project in Global Governance

the Amsterdam treaty, may to some extent be explained by the pressure


exercised by environmentalist lobbies and public support. But it also reflects
the strivings of practically all political elites in the European countries to
harmonize environmental modernization with economic stability and
growth strategies (Hanf and Jansen, 1998). Alliance-building and policy
convergence at the regional level may be effective strategies for winning
political battles at the national level.
Nation-states are constituting their relations to foreign agents as the outcome
of coalitions of mixed, partly contradictory interests and of differences in
sectoral preferences (Hveem, 1994, 1997). The regional project may serve to
support some actors in their national struggles against other actors, repre-
senting a potential for transnational alliance formation. In Austria, leading
political actors allegedly wanted EU membership for the country inter alia in
order to weaken a historically very strong corporatist system for regulating
the labour market in the country. Several sub-regional actors in the EU, on
the other hand, have allied with Brussels in bargaining with ‘their’ national
capitals. Mexico’s business and political leaders wanted NAFTA in order to
deregulate and liberalize the domestic economy, including agriculture
(Calva, 1992), whereas the Chiapa uprisings in the country are, among
other things, directed against NAFTA.
A region with a mixture of competing, if not conflicting identities may be
a non-starter for an integration project. In the same vein a region with a
strong identity shared among its parties is a good prospect for such a project
even if or when other factors – common threat, interdependence, etc. – are
not present. Collective identity, in short, may be underestimated in theories
of regional cooperation, and also become more important in the future
(Higgott, 1998b; cf. Hettne, Chapter 2).
With respect to legitimacy the type and nature of political culture is
important in determining how vital this factor is. The more democratic the
polity and the more civil society has to say for the population of a country,
the more important is legitimacy as compared to efficiency. Legitimacy is
normally vested in national or local institutions, among other things
because familiarity with institutions, with their historical standing, and
transparency in the way they operate, are important legitimating elements.
But efficacy may also be supportive of or otherwise closely related to legitim-
acy. As I pointed out above, this may apply to both business and labour in
the case of the European region. If institutions are not in place at the regional
level, that may reflect a lack of evolution in terms of creating a common
political culture.
Thus difference in political culture, that is, with political institutions and
administrative-bureaucratic procedure and form, may explain why Europe
has stronger regional institutions than has Asia (Katzenstein, 1996). The
legitimacy of institutions may be more important in Europe than in East
Asia. The reason why Europe appears to be dependent on a deepening and
Helge Hveem 93

democratization of its institutions – on developing more federal or suprana-


tional power and procedure – may be that demands on institutions are also
stronger in Europe because civil society is stronger. This may be one important
reason why Asian regionalism appears as very intergovernmentalist in its
decision-making style compared to most other regions, including those in
Africa and Latin America. In general, top-down politics over regional
projects often finds hard opposition. Plebiscitary politics – the use of referenda
to legitimate the decision of state leaders to engage in regional projects – met
hard resistance in some of the EU member states, and they defeated political
and economic elites in the cases of Switzerland and Norway.
The opposite perspective – whereby the regional project is pushed ‘from
the global down’ – puts, first, the emphasis on international, structural factors
to explain regionalization. The regional project becomes a strategy whereby
actors may handle the challenges posed by globalization in a situation where the
nation-state is insufficient in that respect. One contribution explains for
instance East Asian regionalism in terms of three driving forces: (i) globaliza-
tion of production networks; (ii) increased intergovernmental disputes over
bilateral economic relationships; and (iii) the rapid pace of technological
change (Bernard and Ravenhill, 1995). While changes in the world industrial
organization and globalization have not generally reduced the role and
power of the state, they have changed the conditions under which it may
operate (Evans et al., 1985; Wade, 1990; Evans, 1995; Weiss, 1998; Hveem,
2002). Hegemonic actors may have gained from these changes; our points
therefore apply to non-hegemonic actors.
Polanyi made the now classical argument that massive liberalization will
trigger social response – a ‘double movement’ (Polanyi, 1957). Societal pro-
tests, including the transnational manifestations at WTO and IMF meetings,
are recent proofs that he was right. He also argued for a stronger regional
level of governance – the latter for the simple reason that there was, in his
opinion, no alternative to it: there is either globalization under the control
of capital, or regional cooperation among governments (Polanyi, 1945;
cf. Hettne, Chapter 2).
But this is not self-evident. His argument may appear to be illustrated in the
tendency in the EU to relocate and reorganize some of the state’s decision-
making power, so far exercised at the level of the nation-state, to the regional
level. This ‘Europeanization’ of decision-making is to some extent a response
to globalization. A similar tendency may, if it is not seen already, occur in
other regions as well. It may at the same time partly be seen as a response to
the growth of two alternative governance structures, namely the structure of
transnational, private economic governance (centred on transnational corpor-
ations) and the one represented by transnational society (centred on transsocietal
non-governmental organizations, coalitions and networks). If the state is
going to cope with these alternative structures, the view holds, it has to
organize more effective collective action at a level above the nation-state.
94 The Regional Project in Global Governance

Both the two alternative governance structures are there to stay; collective
state action may regulate them, ally with them, share power with them, but
not get rid of them. Among other things the state’s option is to exploit the
differences among the alternatives: the fact that governance by transna-
tional business is normally associated with the efficacy goal, governance by
transnational society with legitimacy and/or identity. The transnational or
trans-state tendencies identified so far may also be associated with an
increasing participatory tendency, a quest for more legitimate governance
(Hocking, 1997). All this is said to have led to a ‘new regionalism’ which
links regions or other local entities at the sub-national level across nation-
state boundaries (Hettne, Chapter 2).
I referred above to the ‘stumbling block’ hypothesis, the neoliberal idea
that regionalization is a threat to economic liberalization into a fully com-
petitive global market. But the hypothesis is contested even by liberal econo-
mists (cf. Tussie, Chapter 6; Mistry, Chapter 7). The view they present is in
line with the view of the ICGG (see above): there has to be a system of ’layered
governance’ whereby the regional level performs governance functions for the global
system. A liberal global order is an idea that carries widespread support, but
because of the complexity and variety of the issues and problems it has to
cover, that order has to be governed through delegation of some governance
tasks to different structures and lower levels of international governance
(Yarbrough and Yarbrough, 1994). The subsidiarity principle that was men-
tioned above with reference to environmental problems within a limited
geographical area, can thus be applied more widely. Its role in trade is
acknowledged in WTO agreements; after the financial crises of the 1990s
there is growing support of regional governance even in finance, namely the
relative success of the Economic and Monetary Union (EMU) and the
renewed support for the idea of East and North Asian monetary collaboration.
On several issues the ‘national to regional’ and the ‘global to regional’
tendencies converge. Corporate leaders favour regional governance when
environmental standards are closely linked to technological development
and affect competitiveness of their regional cross-border production net-
works. Developing countries thus may have a point when they openly criti-
cize the North for setting up regional environment regimes that act as blocs
and barriers to exports from the South, but they may not hit the target
when explaining why they do so. Rapidly increasing costs associated with
research and development programmes and increasing competition based
on new technologies appears to be a major cause. They make it necessary to
pool resources to finance costs and cover risks (van Tulder and Junne, 1988;
Mytelka, 1994; Sally, 1995). The region may offer more collateral than the
nation-state: in a more competitive world requiring faster adjustment and higher
risk-taking in order to preserve competitiveness for firms (and nation-states), the
region may represent collateral, or a critical mass source to finance and organize
vital research and development. Regional cooperation represents a potentially
Helge Hveem 95

stronger bargaining base in inter-regional competition. The early years of


the Andean Pact offers a good example of a strengthened bargaining pos-
ition vis-à-vis foreign investors. But as far as collateral is concerned it may be,
and is also, obtained through strategic alliances and cartels across regions,
such as the sector alliances that have been established in the Uruguay
Round and after in trade negotiations.
Corporate and labour leaders do not necessarily follow conflicting goals
with respect to regional integration; their interests could converge if or
when they learn that a conflict strategy does not work in the long run.
When competition increases and becomes more global, it may also destabilize
acquired competitiveness and increase transaction costs associated for
instance with market information. The fear of destabilization may be particu-
larly strong in regions that are characterized by economically and ecologi-
cally highly interdependent nation-states. If your neighbour is not always
your most important market, he is often an important source of pollution or
a competitor on the commons.
Regulating the access to common waterways, fish stocks, or controlling
against air pollution or dumping toxic waste are cases in point. As an
example there is reason to believe that the combat against CO2 emissions
and the need for corporate managers to address it, strengthens the region
such as the EU as a unit of coordinated action. Managers wish the regional
institution not only to set up a regime that they may follow themselves.
Their main motive for turning to the regional level for governance appears
to be to get help in facing increasing competition from outside the region.
Thus the European Aluminium Association (EAA) managed to get the support
of the European Commission to set up a regulatory system that forced its
own members to reduce production according to a quota system, and more
importantly, to enforce a quota on a new competitor, Russian aluminum
companies, whom the EAA charged with dumping, mainly because they
were not obliged to internalize environment costs. A similar development
has been seen in the chemicals industry where increasing competition from
Asia is met by DERAM, an agreement to regulate imports on environment
performance criteria. Therefore, some economic interest groups want regional
integration to create more predictable rules in their most important markets.
Broadening the issue to include the economic sub-system, the above
arguments in favour of regionalism could easily be overturned if the effi-
cacy question is reformulated. A general distinction may be made between
efficacy in establishing rules and efficacy in implementing them (Underdal,
1997). If that distinction is followed, a multilateral regime would ceteris
paribus involve less costs and thus be preferable to any institution involv-
ing fewer parties. Establishing an institution for the maximum possible
number of participants economizes transaction costs compared to the
alternative – that is, to negotiate and conclude a large number of bilateral
agreements.
96 The Regional Project in Global Governance

The most important costs associated with implementing multilateral


agreements are those required by the need to control against free-riding.
The larger the number of parties, the greater is the probability that someone
will defect. With imperfect information on motives, opportunity costs and
other factors that determine behaviour of parties, the costs involved in
guarding against the possibility of defection rise, in some respects exponen-
tially. In the 1980s there was a widespread perception that the GATT was
too weak to act as a guardian, and bilateralism and unilateralism prolifer-
ated in trade. The latter strategies were much preferred by particular interest
groups, business and labour alike (Yoffie, 1983; Bhagwati and Patrick, 1990).
With the establishment of the more efficient Dispute Settlement Mech-
anism in the WTO, perceptions of the global institution as a guardian against
free-riding have also become more favourable. Still the balance in the calcu-
lation of advantages and disadvantages of global as compared to regional
and bilateral institutions may still be uncertain. While the global multilateral
system is the best guarantee that all parties are sticking to the rules of free
trade, many actors still have problems with its efficiency or its legitimacy (or
both). They are attracted to national policy options found in bilateral strategies.
Since many of the latter find themselves at the border of WTO rules, while
regional arrangements are facilitated more easily by those rules, regional
projects may be favoured. But the spurt in new initiatives for bilateral trade
agreements during the last few years means that the outcome is still unsettled.
The debate between the ‘global level only’ and the ‘layered governance’
schools in the liberal institutionalist camp will no doubt continue for a long
time (cf. Tussie, Chapter 6). One reason is that many economists define the
issue in terms of that debate, and trade economists tend to dominate the
debate generally. But to frame the debate on governance in such terms is to
focus the issue too narrowly. In the narrow analysis politics is mostly left
out. Hence motives other than economic utility, and ideas and interests that
shape policy preferences, are left out.
In sum the role of international regions could be to become a more effective
public institution than each single state in dealing with certain problems
associated with global processes, and at the same time represent a level of
collective identity that makes it more legitimate than global institutions.
The optimal division of labour between the latter, setting rules and standards
which by their nature are universal, and lower levels of social and political
organization, is a theme that should direct future research in the area.

Inter-regional projects and the future of hegemony

The Asia-Pacific Economic Cooperation (APEC) project is an example


of how and where these variations in motivation work out in practice.
APEC, an inter-regional project, would constitute a free trade area that
would eventually cover half of the world’s present purchasing power. And it
could become an important vehicle for environmental upgrading. However,
Helge Hveem 97

the closer it comes to effectively constituting one market, the more are
other motivations and alternative institutions likely to be mobilized. One
prospect is growth in an alternative regionalism that is based on regional
politics and identity. If the latter takes hold, it will make the proposed East
Asian Economic Caucus (EAEC) a much stronger alternative (Higgott,
1998b) and probably also add stimulus to the regional actors’ interest in
a regional monetary arrangement. Some moves have already been taken in
the latter direction.
What Keating and Loughlin say for sub-national regionalism is equally
true for international regionalism: ‘While the theme of regionalism is
increasing in importance, there is an increased differentiation between types
of region and their potential’ (Keating and Loughlin, 1997:18; cf. Hettne,
Chapter 2; Jessop, Chapter 10; Söderbaum and Shaw, Chapter 12). Even
more complex is the task of attempting to make sense of inter-regional politics
(cf. Hettne, Chapter 2). I shall nevertheless make a brief contribution as a
prelude to future research on the issue.
There is a visible dynamism in contemporary inter-regional relations.
Some such relations are of long standing; the North Atlantic community
and NATO is one, the EU–Cotonou (formerly Lomé and Yaoundé) association
agreement another example. The dynamism may probably be interpreted
along two dimensions. One is related to hegemony and sees inter-regional
activism as an expression of the hegemon’s strategy or as a response to it by other
actors. If hegemonic schemes were more easily accepted in the past because
they offered security under perceptions of serious threat, this was not the
case during the 1990s. During this period the number of inter-regional
agreements also increased considerably. Most of them are centred on the EU
which appears at first glance to be the one major actor to benefit from a system
of inter-regional agreements. It is the best-organized regional entity itself, and
is likely to be best placed to profit from bargaining with others. The hegemonic
state, by comparison, meets greater reluctance in the region closer to it –
Latin America – when plans for a continent-wide free trade area are pushed.
One particular aspect of the new inter-regional dynamism is found in
the tendency to compete for a stronger position ‘in the backyard’ of
another major power. The purpose if not the practice of the Asia-Europe
Meeting (ASEM) is an illustration. It was initiated in 1996 and consists of
three pillars – economic, cultural and partly political. Its purpose is three-
fold: to advance EU representation in Asia, to establish a competitor to
APEC, and to balance the influence of the United States in the region
(Hettne, Chapter 2; Forster, 1999; Kirkpatrick and Richards, 1999). ASEM,
however, is still a weak and embryonic institution, partly because the
major powers in the EU did not want it to become a player in the political
field. Other EU agreements with other regions also appear to be more
developed and influential in the economic field, one example being the
agreement with Mercosur, probably another illustration of challenging the
backyard of the hegemon.
98 The Regional Project in Global Governance

If the EU is successful then not only will the United States respond; major
powers in Asia are also likely to respond in kind. 7 For China the United States
appears still to be the only real player in Asia; the EU does not seem to
count much. China’s long-standing rival, Japan, does however look upon
the EU more attentively, as an economic competitor and as a model of how
regional and inter-regional projects may be organized. She is apparently
seeking an improved position in East Asia, her ‘home’ region where she has
faced and is still facing strong scepticism, and she is seeking to reach agree-
ments in trade with actors outside the region such as the Oceanian states.
The anti-terrorism alliance that the United States made so successfully broad
after September 11 did alter this situation and gave the hegemonic state a
stronger position in the short term (cf. Hettne, Chapter 2; Falk, Chapter 4).
The alliance appeared to bring major powers closer together over a common
stand against a problem that plagues all of them in some degree; this
appears to reduce the element of counterhegemonic strategies found in
developments prior to the strike against New York.
The other dimension against which inter-regional governance schemes
may be viewed is the one that Verhofstadt ventured. It is seeing inter-
regional agreements as an alternative to the Great Power concert, the G8,
and as a supplement to global institutions. It may be that the proposal has
partly to do with internal EU politics, as an attempt to advance the interests
of the small countries against those of the bigger which are permanent
members of the G8 and (partly of) the Security Council. If so its chances to
mobilize legitimacy increase, and since its potential agenda is larger than
that of for instance the WTO’s rules on regional governance, it may also
look more promising from the point of view of efficacy. But whether or not
these agreements do is still an open issue.

Notes
1. Available on-line at http://www.eu2001.be/VE_adv_Press.
2. In a speech in Buenos Aires on 2 December 2002.
3. Regions are international, not sub-national regions; the latter are discussed for
instance in Keating and Loughlin (1997); also see Jessop, Chapter 10.
4. See Financial Times, 19 November 2002.
5. I am referring to Hettne and others, see this volume. There is, however, a completely
different usage of the term in Jiru (2002) who defines ‘new regionalism’ to include
‘economic globalization and regional economic integration’ and ‘the principles of
open-up, economic priority and incorporating things from diverse nature’.
6. Viner (1953) and Balassa (1962) have suggested classifications which are still
largely sufficient to account for cooperation in the narrow sense of market regula-
tion. These classifications need to be supplemented or reorganized, however, as
the scope is expanded to include more than market transactions and as there is
also greater variance in the types of market organization adopted (cf. Mistry,
Chapter 7). This appears particularly necessary in view of the agendas and experi-
ences of the EU and indeed those of several other arrangements in the 1990s,
including those of NAFTA, ASEAN, Mercosur and SADC.
7. For further elaboration see Hallenstvedt, Hveem and Torheim (forthcoming 2003).
6
Regionalism: Providing a Substance
to Multilateralism?*
Diana Tussie

Introduction

Globalization is having a profound effect on the political economy of trade.


More countries than ever before have been persuaded to push aside protective
barriers and compete for world markets. These new entrants include a wide
range of developing countries and the former Soviet or Eastern bloc economies.
The result is a pattern of international trade relations which casts a new
light on the multilateral regime which evolved under the auspices of the
General Agreement on Trade and Tariffs (GATT) and continues under the
World Trade Organization (WTO).
Industrialized countries are under pressure to put principles into action.
The United States, the EU, Canada, and Japan (the so-called ‘Quad’ who
dominated the GATT) have long argued that multilateral liberalization is of
benefit to all countries yet maintained protection in sectors such as agriculture
and textiles (Tussie, 1987), and used loopholes in international trade rules
to limit other kinds of exports, including measures such as quotas and anti-
dumping actions. These derogations from free trade have reinforced strong
vested interests in these countries, which make liberalization difficult
(cf. Mistry, Chapter 7).
The expansion of international trade negotiations today covers far more
than traditional North–North or North–South dynamics. Regional trade
relations have multiplied over the past decade. New interlocking games of
cooperation and conflict in intra-regional relations have merged. Many of
these games are played out in the WTO arena. However, most of the literature
poses the links between regionalism and multilateralism as a dilemma and
looks at the impact of regionalism on multilateralism. In this vein, it fails to

* This chapter draws on two previous works: Tussie and Woods (2000) and Tussie
(2002).

99
100 Regionalism: Providing a Substance to Multilateralism?

capture the contribution of multilateralism to regional relations. This


chapter will argue that regionalism thrives in the policy spaces left by multi-
lateralism but that at the same time when these lacunae are too many or too
wide these tensions are then re-played in the multilateral sphere. In this
sense the focus on these neglected games allows us to move away from
one-dimensional views that posit regionalism and multilateralism as dilemmas
of building-blocks versus stumbling-blocks (cf. Hettne, Chapter 2; Hveem,
Chapter 5; Mistry, Chapter 7).
Moreover, trade arrangements today are increasingly vulnerable to shifts
and crises in exchange rates, foreign investment and capital flows. This was
highlighted by the East Asian crisis of 1997 where a financial crisis not only
spread quickly across the region but severely affected trade flows. Net
exports from Western Europe and North America to East Asia declined
sharply as demand in the five most directly affected countries (Thailand,
Indonesia, Malaysia, the Philippines, and South Korea) fell. Overall, the
value of imports into East Asia fell by one-third in the first nine months of
1998 compared with the same period a year earlier (WTO, 1998). At the
same time, the price-competitiveness of East Asian goods in North American
and European markets rose due to their currency devaluations. For these
reasons, the financial crisis of 1997 created new pressures for protectionism
both in East Asia and in the region’s industrialized country markets. In the
same vein, financial volatility in the Southern Cone of Latin America, an
almost permanent feature since 1998, has proven to be highly damaging for
what was until that point in time considered a successful case of open
regionalism: the Mercosur. Following the collapse of the Brazilian currency
in January 1999, relative competitiveness was severely affected; ensuing
non-tariff barriers led to bitter battles. A succession of protectionist
measures, a continuous decline in intra-bloc trade, and finally recession,
diluted the partners’ commitment with the regional initiative.
Many scholars of international relations assume that increasing eco-
nomic openness, such as has been experienced over the past decade or so,
should be conducive to an invigoration of multilateralism. In this ‘liberal
institutionalist’ view, openness and multilateralism are part and parcel of
the same process (Ruggie, 1993) with multilateralism strengthening and
deepening as more countries integrate into the world economy and more
markets converge.
The first section of this chapter outlines the broad political relations that
have underpinned the multilateral trading system since the end of the Second
World War. The second section outlines the characteristics of trade and assesses
their impact on the system. The third section argues that the implications of
globalization pose significant new challenges for multilateralism. The fourth
section discusses the debate about the relation between regionalism and multi-
lateralism. The fifth section analyzes the political economy of regionalism and
Diana Tussie 101

outlines the contribution it might make to strengthening multilateralism.


The conclusions give an assessment of the factors providing new substance
to the shape of multilateralism in the wake of the twenty-first century.

The political economy of the trading system

Over the past fifty years, international trade has been heavily dominated by
the industrialized countries. In this section, the political and economic
reasons and ramifications of this dominance will be examined so as to lay
out a framework for understanding the impact globalization is having on
the politics and the economic of world trade.
As colonial rule disintegrated in the 1950s and 1960s, international trade
changed in two ways. First, the direction of trade shifted as industrialized
countries began to trade more and more with each other and relatively less with
their former colonies. Second, the composition of trade or the kinds of goods
traded altered as industrialized countries exchanged capital-intensive goods with
each other. In other words, rather than trading cars for raw materials (as trade
theory might predict), international trade became increasingly an exchange of,
say, Renaults for Fords. Indeed, since the 1960s about two-thirds of world trade
in manufactures has been in chemical and engineering goods – goods with low
labour or raw material input in relation to capital. Overall this trading system
especially met the needs of a small group of Western industrialized countries,
and often worked against the interests of most developing countries (Tussie, 1987).
Several closely related trends supported a concentration of trade among
the industrialized countries. Greater capital mobility facilitated cross-border
investment which in turn increased trade: indeed capital and goods flowed
hand-in-hand, with trade following investments and vice versa. Some three-
quarters of international investments were concentrated in the industrialized
countries. Furthermore, trade amongst this group of countries intensified as
producers began partially to specialize within particular sectors, rather than
to specialize absolutely. Competition among producers came to focus less on
price and more on the quality and particular attributes of products. Firms
and countries used technological advances to carve out particular market-
niches owing more to the type of good produced than its price. Finally, the
growth and activities of multinational enterprises drove this process, with
firms internationalizing and thereby tapping into the benefits of interna-
tional specialization within the firm: trading within the firm so as to maximize
gains from international differences in production and technology.
Outside the hotbed of trading activity described above, trade did not
flourish. Rather, in sectors and countries where these transformations did
not occur, trade encountered numerous policy obstacles (Tussie, 1987).
Trade frictions flared, particularly between industrialized and newly indus-
trializing countries. As mentioned above, these relations were reinforced
102 Regionalism: Providing a Substance to Multilateralism?

neither by criss-crossing investments nor by intra-sectoral specializations.


Although some international investment flowed into the industrial sectors
of developing countries, it tended not to increase their export capacity.
Rather, foreign direct investment (FDI) tended to flow into sectors where it
could profit from direct subsidies, tax exemptions, and other state inter-
ventions.
The rules of the trading system reflected the trends and industrialized
country interests outlined above (cf. Gamble and Payne, Chapter 3; Mistry,
Chapter 7). Successive negotiations on the GATT liberalized largely two-way
trade in goods between countries with a production capacity and potential
for intra- rather than inter-industry specialization. In other words, the rules
made it easier for the above-mentioned trade in Renaults for Fords as
opposed to cars for beef. Indeed, tariff reductions tended to proceed on a
reciprocal basis, sector by sector, as initiated in the Kennedy Round of trade
negotiations. By contrast, exports from the developing world to industrialized
countries remained subject to high tariffs and non-tariff restrictions (Tussie,
1987; De Castro, 1989). In quantitative terms, average OECD tariff levels
were reduced from 40 per cent to 5 per cent in the four decades between the
1940s and 1980s. However, the least developed countries face tariffs 30 per
cent higher than the average, and developing countries as a group face
tariffs 10 per cent higher than the average. These figures reflect the fact that
tariffs remain high on the goods developing countries produce such as
textiles, leather and agricultural commodities.1
This was a system which developing countries found very difficult to alter
or to sidestep. Producers in developing countries could not ‘jump barriers’
as could multinational enterprises (MNEs) in industrialized countries. The
latter could ‘jump’ impediments to trade by using investment as an alternative
to the export of goods. At the same time, within the industrialized world,
joint-ventures were made possible by the internationalization of capital.
This meant that firms and governments could enter into joint-ventures
which softened their rivalry.
Developing countries played their own part in cementing a double-system
in international trade. They sought early on to derogate from GATT rules so
as to enforce import-substitution or economic planning programmes.
Furthermore, they pressed for special discretionary treatment by former
colonial powers rather than for universally applicable liberalization (Delich,
2002).
In summary, for a number of decades international trade was shaped
by a particular combination of liberalization and protection (cf. Gamble
and Payne, Chapter 3). Trade patterns were reinforced by capital flows
and the freer mobility of capital relative to other factors of production.
Yet while capital-intensive goods experienced greater dynamism and
enjoyed the benefit of deeper tariff reductions, labour-intensive goods
remained relatively protected, with below-average tariff reductions as
Diana Tussie 103

well as a greater incidence of non-tariff regulations. This global trading


system was not one in which developing or Eastern European countries
had a great stake. Yet the stakes of these countries changed dramatically
as of the 1980s.

The globalization of trade

Since the 1980s, trade has been altered by the internationalization of


production, distribution and marketing of goods and services, as well as the
increasing flows of capital and investment which underpin trade. Although
sceptics have presented evidence demonstrating that more trade and invest-
ment took place before the First World War than at present (Krugman,
1997), nevertheless today’s linkages are qualitatively different from those
experienced in the earlier part of this century (cf. Mistry, Chapter 7). These
qualitative differences are worth noting, along with their effects on the
political economy of trade relations.
In the past two decades the trading system has been altered by the emer-
gence of new participants. In the four decades running from 1945 to 1985
global economic expansion was taking place mainly within and among
OECD countries. However, in the wake of the 1980s debt crisis, a large
number of developing countries began to liberalize their economies,
dismantling trade barriers, as well as domestic production subsidies. Subse-
quently, these countries enjoyed an increase in exports as well as imports,
including more trade with OECD countries, and perhaps yet more markedly,
an increase in trade with other developing countries (Krugman, 1995). As a
result, these developing countries today have a much greater stake in the
international trade regime and the application of its rules to their trading
partners as well as to themselves. More recently, they have been joined by
the former Soviet bloc countries who emerged at the end of the 1980s
urgently seeking new markets and trade partners.
Alongside the addition of new participants in the world trading system,
globalization at the end of the twentieth century involved an unprece-
dented degree of functional integration among otherwise internationally
dismembered activities. This was made possible not just by the transit of
goods in the world economy, but by a new rapid flow of tangible and intangible
forms of capital, resulting from changes in technology as well as changes in
industrialized country policies. The growth of capital flows has been explosive,
with an almost fourfold increase in FDI flows being recorded in the period
1985–95 (WTO, 1996). These kinds of flows have been shown to be corre-
lated to increased trade (Industry Canada, 1996). They have also complicated
trade negotiations, adding talks on trade-related investment measures and
services to an already crowded agenda.
The broad implications of growing capital flows integrating national
economies emerged as governments responded with more and more alacrity
104 Regionalism: Providing a Substance to Multilateralism?

to global markets. In particular, governments have turned their policies


towards what they think is necessary to attract foreign capital, privatizing
state-owned companies and thereby sparking a slew of joint ventures in a
myriad of sectors encompassing previously state-owned, foreign and
domestic firms. Such opening brings host countries into a web of multinational
investments as new strategic alliances are created among firms. Big firms in
developing countries have also seized the moment, adopting an accelerated
strategy of internationalization. The need for economies of scale as well as a
generally more benign financial environment has shaken companies to
search for new markets abroad as a way to gain competitiveness. Leading
examples in Latin America include not only the big steel conglomerates, but
also Cemex of Mexico, Techint and Arcor of Argentina, Endesa and Luksic of
Chile. Altogether cross-border investments have expanded dramatically and
with them trade in a number of services.
The opening up of large domestic companies to international capital,
however, has not always had felicitous results. The dramatic inflows of
capital into Korea and Thailand, for example, led to a severe crisis in 1997.
Argentina, among the top recipients of FDI in the 1990s, collapsed in 2001
when investors became wary of the country’s debt obligations. Capital
poured into these countries without appropriate financial sector institutions
of supervision and regulation. In Korea, the spotlight then turned on the
governance of large corporations who were accused of corruption and
mismanagement. In Argentina, foreign banks and private utility providers
quickly moved their liquid assets abroad anticipating the collapse of the
exchange rate. In a crisis of confidence, investors fled more quickly than
they had arrived and international institutions were left attempting to
concoct solutions for the region. The experience of the succession of crises
affecting emerging markets, and of their painful solutions, has injected a
sharp note of caution into arguments about investment and financial opening.
Many governments have now begun to question the wisdom of rapidly
opening their economies to such potential turbulence (Rodrik, 1999).
A further change associated with globalization in trade is a new pattern of
growth and competition in the world economy. The flood of investments
into some of the newly-more-integrated areas of the world led them to grow
temporarily above world averages. Between 1989 and 1996 Latin America,
Eastern Europe and East Asia grew quite vigorously despite the sluggish 2.5
per cent average annual growth in developed countries. The rate of growth
of imports into Latin America and East Asia, as a result of the revolution in
trade policy, was a remarkable 14 per cent a year since 1990, almost
doubling world averages. These growth rates sharpened competition in certain
sectors for the OECD countries and as a result brought new issues onto the
global trade agenda, such as services (i.e. telecommunications, skilled labour
movement, financial services, etc.), a sector in which OECD countries hope
to retain competitiveness. In other sectors, market integration and heightened
Diana Tussie 105

competition has brought issues of labour (Wood, 1995; Lengyel and


Labaqui, 2002) and environmental standards (Tussie, 2000) into sharper
focus. The internationalization of competition has re-drawn both geographic
and political borders. In essence, internationally organized networks under
the aegis of interlocking trade agreements, be they regional, sub-regional or
multilateral, have provoked and endorsed new bargaining relations in
which trade liberalization can provide economic gains without relatively
large adverse impact on individual firms or countries.
Finally, new growth, investment and trading patterns have enhanced the
stakes countries have in free trade arrangements at both the international
and regional levels. Overall, globalization has brought new participants,
new kinds of transnational exchanges, and new sets of relations into the
international trade arena. While many states face new opportunities, they
are also constrained by new vulnerabilities. All of these effects have
profound consequences for the shape of multilateralism.

The challenges for multilateralism

A slightly flagging multilateral trade regime was recharged in 1986 by the


launch of the Uruguay Round of talks. The stated objectives of the Round
included: (i) to bring both agriculture and textiles into the GATT; (ii) to
limit the uses of safeguards (as a loophole for protectionism); (iii) to
improve GATT-discipline on all subsidies affecting trade; and (iv) to include
the new issues of trade-related intellectual property rights and investment
measures (TRIPS and TRIMS), as well as services. The results of the Round
emerged when agreement was reached in December 1993.
In negotiations on agriculture, talks descended into an unseemly and acri-
monious negotiation between the United States and the EU, which was
resolved in a compromise agreement (Avery, 1993). Agreement was reached
to launch negotiations on both TRIPS and TRIMS. Perhaps the most powerful
outcome of all was the establishment of a new stronger institution – the
World Trade Organization (WTO) – for the surveillance of trade policies and
the adjudication of trade disputes.
The WTO came into being on 1 January 1995 and bolstered many hopes
that a more rule-based approach to international trade rules was emerging.
The institution, it was hoped, would stimulate and facilitate further liberal-
ization in world trade in several ways. First, it could set an agenda which
individual governments could not afford to set alone. Second, through
multilateral agreements, it could tie the hands of domestic policy-makers,
giving them a fallback position when faced with demands from domestic
groups. Finally, the institution could undercut the power of pro-protection
interests by promulgating broader public goods.2
The WTO is certainly a more powerful institution than its predecessor the
GATT. Perhaps the most important difference lies in the tightening and
106 Regionalism: Providing a Substance to Multilateralism?

‘legalization’ of disputes resolution mechanisms (Delich, 2002). In the


GATT, consensus was required in order for panel decisions on disputes to be
accepted. In other words, any country could veto a panel decision. In the
WTO, the onus has been reversed so that consensus is required to reject a
panel decision on a dispute. The changes have led to quite a frenzy of countries
availing themselves of the institution’s dispute settlement (Delich, 2002).
Evidence of this ‘leap to legalism’ (Stiles, 1996) is provided by the sixty
disputes waiting in the pipeline for resolution, one-third of which have
been initiated by smaller, less powerful countries.
The implications of a more effective and rule-based disputes mechanism
are easily overstated. Political power within the WTO still lies with the
‘Quad’ (the United States, the EU, Canada, and Japan) who still enjoys
enormous power in determining rules and outcomes. Perhaps more import-
antly, the WTO itself is only one of several fora in which trade policies are
being detailed and implemented. The WTO has already been sidelined in
several instances by unilateral, bilateral, and regional decisions. The US
imposition of extra-territorial sanctions on companies doing business with
Cuba, Iran and Libya offers one example, and the alleged failure of the EU
to comply with WTO rulings on banana imports offers another.
The experience of the WTO to date highlights the fact that multilateralism
depends upon the will of governments. In this sense, it is a very different
dynamic to globalization. Globalization presents even passive states with
both constraints and opportunities. By contrast, multilateralism requires
states to act and to make deliberate policy choices. It is for this reason that
the two processes do not necessarily advance hand-in-hand. Scholars who
link globalization to increasing multilateralism argue that in a globalizing
world states’ choices will be guided by a recognition that long-term interests
will be best advanced by greater cooperation. However, other theories high-
light intervening obstacles to multilateralism.
Perhaps the most powerful challenge to multilateralism lies in the problem
of ‘leadership’. Most theorists agree that leadership is essential for the creation
of a multilateral regime: to set up rules and create a system in which the
participants do not fear free-riding or defection by others. The real debate is
about the prospects for the regime once the hegemon either loses its relatively
preponderant position, or changes its preferences in respect of the regime.
Some theorists have argued that institutions and rules can persist even
after the hegemon loses the capacity or will to ‘lead’ (Keohane, 1984). Critics,
however, propose that continuing ‘leadership’ by a preponderant state is
necessary for a regime to continue. Hence, it was argued at the end of the
1980s that as US hegemony declined, so too the world economy would
divide into regions (Gilpin, 1987: 397).
Since the end of the Cold War it has become more difficult to make sense
of existing theories. In the first place, it is not clear whether the United
States has emerged as more of a hegemon (i.e. the world has become ‘unipolar’)
Diana Tussie 107

or has declined in power relative to the EU and Asia (i.e. the world has
become ‘multipolar’). In security issues, there is no doubt a strong argument
for US preponderance: as evidenced by the Gulf War 1991, the intervention
in Kosovo in 1999 and the invasion of Iraq in 2003 regardless of European
support. Even when in the economic realm, the configuration of power was
not so clear; successive rounds of trade negotiations within the GATT frame-
work were led by the United States (together with the EU) and animated by
the containment of communism. With the fall of centrally planned economies,
for an interval the GATT was stripped of its security role. At the same time
the EU and the United States show a continuing capacity and willingness to
confront each other, as shown by acrimonious disputes over bananas and
beef hormones in 1999, and steel and agricultural subsidies in 2002.
Furthermore, the experience of the 1990s underlined a relative weakness
on the part of both the United States and Europe in the face of financial
crises in other parts of the world. Crises in Mexico 1994–5, East Asia 1997,
Russia 1998, Brazil 1998, and Argentina 2001–2 all demonstrated vulnerabilities
of powerful economies fearing a ‘systemic crisis’. Responses to these crises
underlined the need for the inclusion of new actors in multilateral arrange-
ments (especially of emerging market governments and private actors), and
at the same time underscored the continuing dominance of the United
States which took a lead in shaping the responses of the international com-
munity.
Even if the United States has retained its powerful hegemonic position in
the world trading system (let us assume for a moment that it has), the
multilateral system requires not just a leader but also a certain kind of lead-
ership. In other words, it is not enough for the US to maintain its dominant
position. Of equal importance are the trade policy preferences emerging
within the United States. These are worth analyzing.
In the aftermath of the Second World War, the United States was soon
perceived as champion (and the necessary hegemonic supporter) of a global
liberal trade order, although, as put succinctly by Ruggie (1993: 8), ‘it was
less the fact of American hegemony that accounts for the explosion of multi-
lateral arrangements than of American hegemony’. Complementing its role
as champion of international free trade, the United States worked assiduously
throughout the 1960s and 1970s to resist any efforts at closer regional ties,
particularly in Latin America and Asia, which were seen as potential challenges
to the American project and American predominance.3
In the past two decades, however, the United States has been more protec-
tionist and more regionalist. Protectionism has grown from the ‘new protec-
tionism’ of the 1970s and with the ‘aggressive unilateralism’ of the 1980s
(Bhagwati and Patrick, 1990). At the same time, in the early 1980s, the
United States exhibited a new enthusiasm for regional initiatives. Moreover,
this enthusiasm was largely due to a perception that regional arrangements
offered an important alternative to multilateralism. As Jeffrey Frankel (1998)
108 Regionalism: Providing a Substance to Multilateralism?

describes, in 1982 the United States began to respond to European positions


on multilateral trade talks with the view that ‘if the multilateral road is
obstructed, then we will just have to explore these other roads’. The other
roads included the US–Israel Free Trade Agreement, the Caribbean Basin
Initiative, the Canada–US Free Trade Agreement (CUFTA) and later the
North American Free Trade Agreement (NAFTA). These shifts pose a strong
challenge for multilateralism.
The change in US policy also casts a spotlight on the extent to which US
policy is unilateral. The United States is the only country that has an exten-
sively developed body of doctrine and practice favouring the extra-territorial
application of its laws. Traditionally, US extra-territoriality involved matters
related to anti-trust cases and export controls in the context of national
security. Additionally, however, it can also be used to obtain the intellectual
property protection of its liking, bypassing multilaterally-agreed-upon WTO
standards and procedures. In effect, the US authorities still appear prepared
to determine which are unlawful practices and who are outlaw countries
(Hart, 1994).
For the United States, a rule-based order has often meant the extension
of American rules and procedures to the rest of the world (Strange, 1982).
This was a natural by-product of the hegemony enjoyed by the United
States during the post-war years. However, this era is over. In the present,
more globalized system, the United States risks looking not so much like a
leader (bearing the burden of providing collective goods to ensure that
smaller players do not free-ride or defect) but as a heavy-rider on the
system, eroding multilateralism through its own forceful rebellion against
rules when they are not in its interests. In a more global economy, the
litmus-test of multilateralism rests crucially on the disposition of the
United States to follow the rule of law – a law that it will not always be
able to control.
Multilateralism is further challenged by the increase in the number of
participants in the international trade regime. The conversion en masse to
outward orientation has happened with equal speed and fascination in a
great number of countries. In 1950 there were about thirty members – ‘con-
tracting parties’ as they were then called – to the GATT. Over five times that
number are now members of the WTO. The dilemmas of large-number
multilateralism have been described and analyzed by Kahler (1993). Greater
numbers, he has demonstrated, diffuse influence and make collective
decision-making difficult, heightening the uses of minilateral devices as
participants grope towards agreement.
Even deeper than the problem of multilateralism with large numbers of
states, is the challenge of ensuring that all participants in the world trading
regime have a strong stake in the system and are committed to its rules. In the
past, dissatisfaction with the international economic order was expressed by
withdrawing from active involvement: de-linking, industrial-planning,
Diana Tussie 109

state-trading, quasi-autarchy or heavy import-substitution all expressed


a discontent with the international order and a search for varying degrees of
immunity from its effects. Later, a policy of obstructionism was used with
the onset of the Uruguay Round as a loosely assorted coalition of developing
countries led by Brazil and India attempted to bargain for reform (Kumar,
1993).
In the 1990s, developing and other countries decided to participate in the
existing system, and where necessary, to undertake new kinds of bargaining
strategies in order to bring about reform (Woods and Narlikar, 2002). An
inclusive system, which sustains their interests, is now a requirement of the
international trade regime. This is a tough order given the plurality of views
about trade, as evidenced by disputes over ‘fair’ trade ranging through anti-
dumping laws to environmental and labour standards. In summary, the
political process of managing an institutional arrangement for globalization
will not be easy. It will suffer, as multilateralism always has, not so much
from the lack of leadership but from the ebb and flow of US commitment to
international institutions.
The Seattle Ministerial meeting was an indicator of the ambiguity of
American commitment to the multilateral regime. For a while it seemed
that the WTO would suffer a legitimacy crisis. Conflicts between the United
States, the EU and Japan, and also between industrialized countries and
developing countries foresaw a rather pessimistic outlook for multilateralism.
The events of September 11 radically altered this perspective and shook off
the indifference of American authorities towards the WTO. In the aftermath
of the terrorist attacks, the Republican administration resorted, as throughout
the Cold War, to the political use of trade issue. Trade once again became
wrapped up with value-laden imperatives and proselytizing. A round of
negotiations in the WTO was predicated on its contribution to the war
against terrorism, much in the same fashion as trade was seen to stand
against communism in the 1960s and 1970s. Thus, the notion of trade liber-
alization has become implicitly one of moral approval and political purpose
tying the United States and the EU into an alliance. The strength of the
commitment was quickly put to the test as unilateral decisions on steel and
agricultural subsidies soured the atmosphere again. For many, these
measures cast doubt over the US commitment to free trade. However, the
conflict in American trade interests is not a new phenomenon. Suffice it to
recall that when drafting the GATT, the United States had also introduced a
double standard: while quantitative restrictions for industrial protection
were forbidden (Article XI), they were permitted for agriculture at the
request of the Department of Agriculture. American politics has always
balanced contradictory interests when trying to exercise world leadership.
The appeasement of inward-oriented sectors and a commitment to minimize
socially disruptive domestic costs facilitates the sustained promotion of
export-oriented firms and sectors.
110 Regionalism: Providing a Substance to Multilateralism?

The emergence of regionalism

The past two decades have seen a strengthening and deepening of regional
trade arrangements as almost every country in the world has joined some
kind of preferential trading arrangement. The EU has moved towards a single
market. The NAFTA has cemented a free trade area between Canada, the
United States and Mexico and is now further extending its membership. A
larger, less formal arrangement has been consolidated by the Asia-Pacific
Economic Cooperation group (APEC). In South America countries have
joined Mercosur. In other parts of the world, the list includes: the West African
Economic and Monetary Union (WAEMU/UEMOA), the Southern African
Development Community (SADC), the Common Market of Eastern and
Southern Africa (COMESA) the Maghreb Union, the Association of
Southeast Asian Nations (ASEAN), the South Asian Association for Regional
Cooperation (SAARC), the Gulf Cooperation Council (GCC), the Latin
American Integration Association (LAIA), and the Caribbean Community
and Common Market (CARICOM). More recently, in the Western Hemisphere
Latin America has been quick to engage in negotiations for the creation of
the Free Trade Area of the Americas (FTAA), setting in motion a low-profile
machinery which has minced through complex technical issues.
For many developing countries who felt excluded from GATT, regional
arrangements provide an opportunity for the market access they always
wished for but had never really extracted from multilateral negotiations
(cf. Mistry, Chapter 7). Furthermore, many countries have been helped by the
unilateral liberalization of neighbours and the commitments undertaken in
the context of regional trade agreements.
The impact of regional arrangements on trade flows and relations is the
subject of heated debate among scholars (Ito and Krueger, 1997). Empir-
ically, the experience of the 1990s in most regions of the world (with the
notable exception of the EU) has been one of increasing intra-regional trade.
This is clear from Table 6.1. Note that these figures have not been disaggregated
so as directly to reveal the extent that formal trading arrangements may
have increased trade. Nevertheless they show a picture of increasingly
concentrated intra-regional trade.
In summary, at the same time as regional trade agreements are flourishing
in international economic relations, so too trade flows are also increasingly
intra-regional. In Europe, the Western Hemisphere, Asia and Africa, the
percentage of countries’ exports and imports going to and from other countries
within the region has grown over the past decade. The exception has been
in the Middle East where a breakdown in political relations since the Gulf
War 1990–1 has influenced trade.
One-dimensional perspectives fall into either over-optimistic or over-
pessimistic views of the relation between regionalism and multilateralism.
An optimistic view of the consequences of regionalism posits that regional
Diana Tussie 111

free trade arrangements are ‘building-blocks’ towards global free trade.


Regionalism, it is argued, facilitates liberalization since it is politically easier
for countries to liberalize their trade barriers within a regional arrangement.
Once they have done so, the argument continues, it becomes politically
much easier to liberalize vis-à-vis the rest of the world. Likewise, the optimists
highlight that regionalism has increased the depth of liberalization since
regional free trade agreements frequently involve integration or harmonization
of a number of loosely assorted trade-related policies. This has led to negoti-
ations at the international level on policies regarding intellectual property,
as well as investment rules, labour rights, tax and competition policies, and
the treatment of the environment. In other words, regionalism is assisting
the passage from shallow to deep integration (Lawrence, 1993).
The pessimistic view is that regionalism creates a stumbling-block to
multilateralized free trade, that ‘open regionalism is nothing but an
oxymoron’ (Srinivasan, 1998: 340). Once a region has established a free
trade regime among its members, there will be an increasing temptation and
opportunity for raising barriers to non-members. As Oman has written,
‘powerful OECD-based multinational firms that might once collectively
have constituted a strong political force against regional protectionism in
OECD can no longer be counted on to play that role’ (Oman, 1999: 57–8).
The argument is that once multinationals have established a presence
within a major region, they will give more importance to lowering intra-
regional trade barriers, rather than inter-regional barriers. Hence, the risk is
that regionalism will facilitate rather than erode ‘Fortress Europe’ and other
such regional islands of economic activity.
A third view of regional trading arrangements reminds us of the geography
of regions, pointing out that the geographical proximity of neighbours
plays a crucial role in the impact of any free trade arrangements. Indeed, to
some degree regional concentrations of trade flows may be due more to

Table 6.1 Intra-regional exports as a share of total exports (%)

Region 1990 2000

European Union 65.1 61.9


Mercosur 8.9 20.9
Andean Community 4.3 8.8
NAFTA 42.6 56.0
ASEAN 20.1 23.7
COMESA 2.1 4.6

Sources: Common Market for Eastern and Southern Africa,


http://www.comesa.int/, visited during 2002; World Trade
Organization (2002) International Trade Statistics 2001
(available online at www.wto.org).
112 Regionalism: Providing a Substance to Multilateralism?

‘gravity’ or market proximity than to formal trade arrangements. It is widely


accepted, however, that formal agreements can have effects on confidence
and on investment, as was seen in the case of NAFTA and Mercosur where
the formal free trade agreement increased investment flows in neighbouring
countries and thereby trade.
However, the nature of the relationship is not uni- but bi-directional
(cf. Hettne, Chapter 2; Hveem, Chapter 5; Jessop, Chapter 10; Bøås, Marchand
and Shaw, Chapter 11). Most of the literature has focused on the links
between regionalism and multilateralism as a dilemma and looks at the
impact of regionalism on multilateralism; but it has failed to capture the
contribution of multilateralism to healthy regional relations. Regionalism
thrives in the policy spaces left by multilateral commitments, but when
interstices are too many or too wide they quickly become a source of
regional friction. The case of anti-dumping exemplifies how the WTO scene
is now serving to tie and untie loops in regional agreements. In Latin America,
Brazil and Chile, usually ‘victims’ of anti-dumping measures, are keen to
reach stricter WTO disciplines and to use such disciplines as a policing
instrument of regional relations. Other countries in the region, frequently
applicants of anti-dumping procedures, maintain exactly the opposite
stance. Instead they are inclined to give the WTO a stronger hand in the
control of subsidies over which regional agreements have not advanced
much beyond multilateral disciplines.

The political economy of regionalism in trade

Regionalism in world trade has both positive and negative implications for
liberalization and for multilateralism. On the negative side, there is a danger
that the new regionalism will erode states’ commitment to multilateralism
and perpetuate a very partial and unequal form of liberalization. A first
crucial question is how ‘outsiders’ to prosperous regions are treated and
whether or not this alters their commitment to multilateralism. The impact
of the new regionalism on countries lying outside some regions has been
very harsh. For example, countries bordering the EU have found regionally
organized trading regimes presenting a series of closed doors to them. The
initial enthusiasm of former Eastern bloc countries to dismantle trade barriers
has been replaced by a bitter recognition that the trade practices of most
large industrialized countries are protectionist and restrictive, even though
they are legal within GATT/WTO rules (Pietras, 1998). In this context, many
countries bordering successful ‘regions’ such as the EU or NAFTA are not
only trying to gain entry but are also considering new regional areas of their
own, as evidenced by NAFTA’s catalyzing of Mercosur and progress towards
a FTAA.4
A second problem for the predominance of multilateralism is that regional
trade institutions might be used by states as an alternative to multilateral
Diana Tussie 113

institutions. Once powerful states have set up regulatory and legal institutions
at the regional level, they may well start preferring to use these institutions
even in disputes that should rightly go to the WTO – choosing the forum for
dispute-resolution according to what is most likely to serve their interests.
Such behaviour erodes the ‘rule of law’ in international trade, suggesting
different laws for different states according to their region and their power
to influence regional fora. Furthermore, if powerful states focus attention
inwards on their region and regional institutions, they are likely to neglect
international fora and organizations.
These negative implications of regionalism do not overwhelm other con-
siderations. It is worth noting that no country has a clear-cut choice
between regional trade and international trade. All regions depend heavily
on other markets: the EU relies heavily on North American markets, as does
Japan; NAFTA offers too small an arena of trade for the United States –
indeed, the US impetus for the Uruguay Round was to open up access to
foreign markets, to extend coverage to agriculture and services and to
address areas like intellectual property and foreign investment (Odell and
Eichengreen, 1998: 183). At the same time, the evidence suggests that
powerful states gain important bargaining leverage from participation in
regional blocs. The United States, for example, used the threat of NAFTA
and APEC to force other countries to take the Uruguay Round seriously.5
Hence, regionalism is not in competition with multilateralism but it can
increase the bargaining power of large players with a regional option.
On the positive side of the relationship between regionalism and multilat-
eralism, it is worth noting that the new regionalism is being driven more by
markets and less by policy, or by fiat or even enlightened bureaucrats. Few,
if any, of the new associations (with the exception of the EU) are really a
bloc. The new regionalism is more a product of the expansion of trade and
cross-border investments among neighbouring countries after unilateral
liberalization.
Furthermore, the new regionalism bridges the traditional division
between industrialized and developing countries that had marked the GATT
(cf. Mistry, Chapter 7). This was expressed (as noted above) by one-way
exports (in a North–South or South–North direction) riddled with barriers of
all kinds, and in messy efforts to compensate for the bias, such as by allowing
developing countries ‘special and differential treatment’ (whereby develop-
ing countries were not expected to provide fully reciprocal access to their
markets and were granted preferential access to industrialized countries’
markets). Special and differential treatment proved to be no solution and,
indeed, became a continuing source of friction as developing countries
remained dissatisfied with the access they obtained, and industrialized
countries grumbled about free-riding.
The new brand of regional free trade agreements tends not to make a
distinction between types of countries or levels of development. Within
114 Regionalism: Providing a Substance to Multilateralism?

NAFTA, Mexico has eliminated virtually all border restrictions – in agriculture


as well as in industry – from 70 per cent of its imports coming from the
United States and Canada. The negotiations of the United States with Chile,
Jordan and Singapore and the negotiations for the FTAA are expected to
follow the same pattern – with little, if any, special and differential treatment.
Regionalism may well concentrate the power of already-powerful states.
However, regionalism may also diffuse power if weaker countries act in bloc.
Since bargaining power has depended essentially on market size, a regional
trading unit will tend to have more market power than any of its members
alone. By decentralizing decision-making and strengthening plurilateral
processes in a framework which gives even the weaker countries some say,
the new regionalism will lead to the kind of multilateralism in which
regional units will have stronger bargaining power (cf. Mistry, Chapter 7). A
small number of units engaging in inter-bloc negotiations would tend to
make cooperative solutions more likely.
All this supports the view that regionalism and global free trade cannot be
seen as mutually exclusive options, whereby interest in one diverts interest
in the other. Regionalism and multilateralism now inhabit a constantly
revolving interaction. No regional unit seems to be fully inward-looking, as
shown in Table 6.1. Indeed, no regional unit can afford to be so, nor to grow
apart from others. Markets are so deeply intertwined that no unit can afford
to sacrifice intra-regional trade at the expense of inter-regional trade. No state
has an interest in substituting regional for global trade. Regionalism rather
reflects that countries are choosing to forge ahead faster or further than the
multilateral track affords. The result is that trade between regions may not
grow as fast as within them, but global trade will not necessarily deteriorate.
If arrangements of the EU with other regions such as Mercosur materialize,
they are bound to have an impact on inter-regional trade.
The relationship between regionalism and multilateralism is one of
mutual need. Multilateral rules provide regional blocs with necessary under-
pinnings, especially in the highly controversial issues that require external
safety nets. In turn, multilateralism must be seen to rely on the safety net
provided by the web of regional agreements, which allows trade liberalization
to advance gradually bit-by-bit, literally bartering the pains of liberalization
with the gains of market access and export growth. It is in essence not free
trade at all costs, but a risk-minimizing strategy resting on concrete trade-
offs between liberalization in some sectors and increased market access for
others (cf. Mistry, Chapter 7).
It is conceivable that such regional institutions would be structured so as
to give voice to a wider range of countries – permitting them to have a direct
say at the regional level rather than remaining unheard at the international
level. In this way, regionalism could provide a counterweight to the
continuing dominance of powerful industrialized countries that has accom-
panied globalization (cf. Hettne, Chapter 2; Gamble and Payne, Chapter 3).
Diana Tussie 115

Conclusion

Globalization in trade describes more than an increase in cross-border trans-


actions. It refers to a transformation in the production, distribution and mar-
keting of goods and services and an expansion of the international trade
regime to include virtually all countries in the world economy. The result has
been a pattern of world trade that is both global and highly transnational and
in which some actors now conceive of their interests on this basis.
The transformation has not, however, been fully echoed by a major shift
in the politics of international trade. The inequalities that marked negotiations
and outcomes under the GATT system have largely remained: reductions in
trade barriers are still weighted towards the goods and services produced in
the industrialized countries, and these countries still dominate the multilateral
regime. The multilateral system of rules and negotiations, however, is now
seriously challenged not just by the large numbers of new entrants, but
equally by the risk of insufficiently committed leadership.
The nature of emerging regionalism deeply affects multilateralism and the
international trade regime. Three issues in particular will shape its impact
on international trade. First, members of regional units are increasingly
likely to demand new services from the WTO, so that its disciplines serve to
police regional relations. This need is a severely understated case of how
regionalism is providing a substance to multilateralism. In the second place,
if rules within regional trade areas converge with multilateral rules they will
reinforce the multilateral system. Third, regions may well prove to be a good
vehicle for smaller countries to enjoy more of a voice in international trade –
magnified by their combined market share and political power. However, if
bargaining arrangements are not reshaped, there is also a risk that regions
may offer powerful countries smaller multilateral fora in which they can
dominate more decisively.
In conclusion, globalization sets new requirements for international political
relations in trade. Yet the need for stronger cooperation and coordination
among states is not necessarily strengthening multilateralism. Disappointment
with the returns of the WTO process has spurred a keen interest in regional
initiatives as a complement, rather than an alternative, to the global regime.
After a decade of blossoming regional and sub-regional trade agreements,
three results have become clear. First, the benefits reaped by developing
countries from multilateral trade agreements fall short of expectations.
Second, regional arrangements risk becoming small areas of hegemony
where predominant countries can increase their power. Third, the regional,
sub-regional and multilateral arenas are in constant and revolving interaction.
Multiple games take place simultaneously; each level has an intrinsic value
but it also serves to play off the other two. Multilateralism may no longer
monopolize the configuration of trade relations but it has been given more
substance and a new role.
116 Regionalism: Providing a Substance to Multilateralism?

Notes
1. Textile and clothing, for example, accounts for 24 per cent of Sub-Saharan African
exports, 14 per cent of Asian and 8 per cent of Latin American and Caribbean
exports (UNDP, 1997: 85).
2. These are the kinds of effects that scholars predict will flow from the creation of
formal institutions; see Goldstein (1998).
3. The regional efforts of the 1960s were indeed signals of the discontent with a
US-dominated ‘multilateralist’ world economy.
4. Cf. the view and the evidence that regionalism is being accompanied by stronger
global interdependencies (Poon and Pandit, 1996).
5. On NAFTA, see Schott (1989) and Wiener (1995); on APEC, see Destler (1995) and
Frankel (1998).
7
New Regionalism and Economic
Development*
Percy S. Mistry

Regionalism and development: genesis and evolution


of influences

The role of regionalism in accelerating development is contentious. But


views are converging as earlier focus on economic integration widens to
embrace regionalism (Hettne, 1999). Between 1950 and 1990 theories of inte-
gration reflected a schism between theories of trade and those of develop-
ment. Under both, the impact of trade barriers (tariff and non-tariff) was
seen as the key issue to be resolved through regional integration arrangements
(RIAs). Between 1950 and 1970 a theory of customs unions emerged to pro-
vide an analytical framework for RIAs, employing concepts of trade creation
and diversion.1 As a derivative of trade theory, it did not accommodate the
non-economic dimensions of regionalism.
Departing from customs union theory, prominent development econo-
mists, such as Prebisch (1950, 1964) argued in the 1950s and 1960s for pro-
tective regionalism in order to accelerate industrialization, capital
accumulation and growth. Contiguous developing countries were encouraged
to enlarge their economic space by lowering tariffs among themselves while
erecting tariff walls around their regions. Protective (fortress) regionalism
was founded on theories of import-substituting industrialization and gov-
ernment domination of productive activity. That was seen as a more attractive
alternative to capitalism (associated in developing countries with colonialism).
Between 1950 and 1990, development theorists and policy-makers believed
that reliance on markets for development risked perpetuating structural inequi-
ties (i.e. favouring the strong over the weak and the rich over the poor).
Markets were perceived as imperfect, prone to information asymmetries and
failure, rather than being more efficient than governments in allocating

* This chapter draws on two previous chapters produced within the UNU/WIDER
project on new regionalism, entitled ‘The New Regionalism: Impediment or Spur to
Future Multilateralism?’ (Mistry, 1999) and ‘Regional Cooperation and Economic
Development’ (Mistry, 2000).

117
118 New Regionalism and Economic Development

resources through price mechanisms that equilibrated overall supply and


demand automatically.
Influential trade theorists, such as Bhagwati (1968) and Johnson (1965)
on the other hand, argued against protective regionalism and import-substi-
tuting industrialization on the grounds that they imposed a barrier not just
to trade but to development. Tariff walls bred complacency and inefficiency
in closed economies, leading to a loss of competitiveness. They were inher-
ently inequitable and led to an overall loss of economic welfare by subordin-
ating the wider interests of a large number of consumers to the narrow,
self-serving interests of a smaller and privileged group of producers.
Early development theory held sway for some time (1950–80). But, with
mixed economic performance, and pervasive crises in the two regions that
applied protective regionalism (Africa and Latin America), it lost credibility.
By contrast, other countries (in East Asia) had pursued different strategies
with more success. Their experience provided the template for reform in the
era of adjustment that swept across the developing world from 1982
onwards. ‘Economic reform’ became the watchword for a paradigm shift
from protectionism towards openness to trade and export-led growth, relying
on private agents competing in free markets. Reform called for governments
to withdraw from production and move towards regulating market activity
to ensure fair competition. Abandoning import-substitution as a develop-
ment strategy meant abandoning protective regionalism. Consequently, the
closed regionalism that characterized first-generation RIAs in the developing
world (c. 1950–80), gave way to open regionalism with second-generation
RIAs being based on openness to trade, knowledge and capital flows as the
guiding principle.
In the end, trade theory prevailed over development theory in influen-
cing thinking about regionalism and development. It mirrored the victory
of markets and democracy over ‘command-and-control’ regimes. The logic
of trade liberalization was applied to moderate the tide of regionalism that
surged in 1990. Orthodox opposition gathered strength at the time of
Uruguay Round negotiations (Bhagwati, 1993). But the regionalism impulse
did not abate when that round ended. Instead the ‘urge to merge’ became
stronger while the power of customs union theory to define regionalism
weakened. Indeed that theory has become less relevant as forces beyond
trade and economics shape ‘new regionalism’ (Hettne, 1999; cf. Hettne,
Chapter 2).

New regionalism as a response to new risks

The post-1990 surge in regionalism is remoulding the global order while the
evolution of the EU (through widening and deepening) is influencing
regionalism in the developing world. It is changing both the notion of
regionalism and the process of regionalization. In the EU, the trade
Percy S. Mistry 119

dimensions of integration have become less important as monetary union


proceeds, and as further steps are taken towards a single European market,
identity, and voice in world affairs. With the EU influencing its substance,
regionalism has become a multidimensional social and political phenomenon
replacing trade-focused integration (Hettne, Chapter 2).
Regionalism has also become a response to new risks that have emerged
(cf. Hveem, Chapter 5; Tussie, Chapter 6). The debate about regionalism and
development now is less about the utility of integration and more about: (i)
the kind of regionalism that is appropriate for different regions in order for
them to matter in the global regime that is evolving with the emergence of a
‘WTO-driven’ trading regime; (ii) rapid globalization of markets, production
and capital flows; and (iii) the breakdown of bipolarity that governed global
security between 1945 and 1990.
This troika of related phenomena poses different challenges for develop-
ing regions in the twenty-first century. The economic and security risks now
being confronted by national governments are heightening insecurity; leading
them to consider pooling sovereignty and managing risks collectively. In
the developing world, regionalism is not merely an adaptive response to
globalization and the breakdown of bipolarity. It is a mechanism to cope
with the hegemony of the United States and the risk of resort to unilateralism
on its part. There is a growing sense that unless the developing world
reshapes itself (like Europe) into a few powerful regional blocs it is unlikely
to have much say in the world order that is emerging. The alternative of its
remaining divided into 200 disparate sovereign countries, most of which
have little or no econo-political weight in the global system, has implica-
tions that are unacceptable.
These trends raise questions that have yet to be satisfactorily answered.
Will the impulse for new regionalism derail multilateralism? Can genuine
multilateralism be practised in a unipolar world? Is regionalism an essential
bulwark against unilateralism? Can developing countries gain by relying on
multilateralism that disenfranchizes them from playing a role commensur-
ate with their aspirations, their size and populations? Will successful
regionalism eventually lead to more workable multilateralism based on a
more balanced distribution of economic, political and military power across
regional blocs of equal size, leading to more stable equilibrium in the struc-
ture and functioning of the world’s political economy? What are the ingre-
dients and recipe for ‘new regionalism’ that will make future regional
arrangements more secure, durable and effective?
Answers to these questions cannot be provided without an adequate con-
ceptual framework. A new theory of international relations is needed that
embraces the role of ‘regions’ as key actors on the international stage; in the
same way that prevailing international relations theory accommodates the
role of sovereign nation-states based on an obsolescent Westphalian model.
Such a theory must embrace politics, economics, security and culture as key
120 New Regionalism and Economic Development

dimensions of the new regionalism. It must accommodate not only the new
political and economic roles of regions as crypto-sovereign actors but corres-
ponding changes in the political and economic roles of nations when sover-
eignty is pooled (partially or fully) through regionalism, whether for specific
purposes (for instance, trade) or in wider senses. Until such a theory
emerges, the role of regionalism in economic development can only be
understood through empirical analysis of the history of RIAs in developing
countries and of presently unfolding practical experience, i.e. what in this
analysis is referred to as ‘pragmatic empiricism’.
This chapter attempts to do that in its various sections dealing seriatim
with: (i) a brief background to regionalism in developing countries;
(ii) new regionalism in the developing world, namely, its economic and
political dimensions and the evolution of second-generation RIAs; (iii) bar-
riers to deriving gains from regionalism; (iv) emerging inter-regionalism
vs. intra-regionalism; (v) regionalism vs. multilateralism; and finally (vi)
conclusions.

Background to regionalism in developing countries: a truncated


overview

Although customs union theory was developed in 1950, RIAs and regionalism
emerged long before then. Pre-colonial empires were precursors of modern
regionalism. Some of these arrangements (such as the Roman Empire) lasted
several centuries embracing monetary and political unions. Successful colo-
nial RIAs emerged between 1850 and 1950 across most of what is now
the developing world (Mistry, 1996a). They did not last for more than a few
decades although they preceded (and, in some instances, shaped) the RIAs
that were entered into by countries that ceased being colonies. Between
1960 and 1990 developing countries experimented with a number of first
generation RIAs based on protectionism in different regions (Mistry, 1996a:
14–20). Mostly, these arrangements took the form of preferential or free
trade areas. A few graduated to the level of customs unions and, in even
fewer cases, monetary unions. But these arrangements proved fragile. They
generated limited tangible benefits that were inequitably distributed, erod-
ing popular and political support for their continuation. The lessons learnt
resulted in second-generation attempts to avoid repeating failure (de Melo
et al., 1992).
Post-1990 RIAs differ in that they: (i) involve greater diversity among
members; (ii) have an outward orientation with openness to trade, capital
flows, technology, knowledge and high-level manpower; (iii) go beyond
trade liberalization in goods to include liberalization in services, invest-
ment, technical and regulatory standards, etc.; (iv) strive to attain global
competitiveness of the region concerned as well as that of its individual
members; (v) involve arrangements among member countries that have
Percy S. Mistry 121

already undertaken significant unilateral trade liberalization; (vi) increas-


ingly involve North–South memberships that go beyond the North–North
and South–South RIAs that characterized the past.
More importantly, the economic model pursued by developing members
of RIAs is converging towards a universal market-economy model, whereas,
in the past, the diverse models pursued (communist, socialist, quasi-market)
were incompatible, making RIAs more difficult to knit together. At the same
time the disparate, chaotic political models around which developing coun-
tries have evolved are also converging towards a plural democracy model
that underpins the market. Both trends create a more benevolent environ-
ment for regionalism to emerge and endure; both have implications for the
future of regionalism.
Despite profound differences between first and second-generation RIAs,
there is as yet no consensus on how RIAs should evolve in coming years, or
on the institutional support structures they need. Nor is there agreement on
how ‘new regionalism’ might be applied across the developing world and be
endowed with more credibility than RIAs of the past. Nor is it clear how
regionalism can help countries to restructure national economies, achieve
production efficiencies, and attain levels of competitiveness that enable
them to earn a sustainable living in a global economy characterized by
structural distortions favouring developed countries. First-generation RIAs
proved that overly ambitious integration attempts – that took no account of
economic, political and social realities – were recipes for failure. For eco-
nomic integration to succeed and regionalism to take hold in the long run,
the process of regionalization must be based on less ambitious but achiev-
able cooperation in the short run.

New regionalism in development: economics, politics and


second-generation RIAs

The economic dimension


New regionalism involves more than economic dimensions. But it is unrealistic
to expect decision-makers to enter into regional arrangements without
assessing the economic gains their countries can accrue. The logic is circular but
valid. The case for twenty-first-century regionalism goes beyond economics.
But the economics of the case provides its starting point. Assessing economic
gains and making the public aware of them is a key task of any government.
Such assessments need to go beyond customs union theory and take into
account that in a globalizing world the net gains from trade creation may be
captured not just by members but by countries outside the region as well.
Traditional analysis of the economic benefits accruing from trade creation
vs. diversion focuses on static (orthodox) gains.2 By contrast, the unortho-
dox (dynamic efficiency) gains of regionalism go beyond a one-time effect.
122 New Regionalism and Economic Development

They lead to sustained increases in the rate of real income growth in


a region. Dynamic gains arise because: (i) regional harmonization of
economic policies results in lowering tax-arbitrage, uncertainties, risks and
costs for all investors, and increases the attractiveness of the region to for-
eign investors; (ii) portfolio diversification opportunities arise for investors
and savers thus enhancing the stability and value of such portfolios; (iii)
firms become more competitive in enlarged regional markets thus improv-
ing prospects for capturing a larger market share in the global economy; (iv)
improvements in price signalling mechanisms invariably result when small,
inefficient markets are enlarged and producers are faced with greater
internal competition; (v) successful regionalization reduces market imper-
fections and information asymmetries through improved regulation, higher
transparency and reduced scope for collusion among firms; and (vi) greater
factor mobility (i.e. of capital, people, knowledge and technology) results
in greater overall efficiency and effectiveness in the use of resources result-
ing in multifactor productivity gains that again contribute to enhanced
competitiveness.
In developing regions, dynamic gains can also accrue from: (i) adjustment
on a regional scale that gives markets a chance to work in ways that they do
not in small national economies;3 (ii) more attractive opportunities for foreign
direct investment (FDI); (iii) removal of fiscal impediments to market unity
resulting from tax evasion, smuggling and corruption; and (iv) cost-savings
through regionally coordinated investment in electricity, telecommunications,
water supply and transport.4
Considerable potential exists for realizing orthodox (static) and unortho-
dox (dynamic) gains from regionalism in the developing world. But there
are few quantitative assessments of whether such gains have actually been
derived from extant or previous RIAs. Nor are gains easily derived without
initial dislocation and adjustment that can be painful in terms of industrial
and labour market restructuring. The costs of restructuring fall unevenly on
different countries, raising issues of equity and distribution that require sen-
sitive management at national and regional levels simultaneously. More
needs to be known about the short vs. long-run capture of orthodox and
unorthodox gains from regionalism in developing countries; as well as gains
not just from tariff reductions but from the removal of non-tariff barriers
(NTBs) and institutional barriers. Future research requires unorthodox gains
to be better identified and quantified. Given their nature, the extent to
which they are realized depends on political will to subordinate narrow
national interests in the short term to achieve regional gains over the long
term that benefit all members.

The political dimension


However large the economic gains from regionalism may be in theory, it is
the political effort exerted to capture them that accounts for the success and
Percy S. Mistry 123

durability of regionalism. Acknowledging that potential for gains exists is not


enough. Just because static and dynamic gains can be derived does not mean
they will be. Absence of unity, coherence or consensus on the part of mem-
bers about the political and economic significance of regionalism impedes
its steady progression, whether in mature arrangements like the European
Union (EU) or in developing country arrangements at a less mature stage.
RIAs in the developing world are always backed by powerful political rhet-
oric that is rarely translated into reality. Judged by their actions, the
regional agenda of most developing country governments contradicts their
political support and treaty commitments. Even when they agree on the
broad outline of the kind of regionalism they are aiming to achieve, govern-
ments disagree on modalities, steps, timing and sequencing of measures
towards further integration. Sometimes, a government’s commitment to
regionalism is compromised by apprehensions about the behaviour of other
members; particularly when they dominate the region or when they block
progress on key issues of importance to their partners.
Movement from limited regional integration to all-encompassing region-
alism depends on the political will that governments are able to muster in
favour of it. More often than not, political will is rarely based on the sub-
stantive issues at stake for member countries individually, or for the region
as a whole. It is instead dependent on the degree and nature of the public
support for regionalism prevailing in member countries, and on the private
short-term agenda of public officials, politicians, and leaders who subordin-
ate regionalism to immediate political exigencies and the local pressures
they face – whether in getting re-elected or exercising power in a particular
direction. Sometimes it is influenced by political misperceptions based on
misreading of the public mood.
Just as there are economic gains (and costs) associated with regionalism,
so there are political and social gains and costs. These often accrue at the
supranational (regional) level with national governments and parliaments
becoming disenchanted with the loss of sovereign power that regionalism
entails. When gains accrue at the national level they are often diffuse; not
easily discerned or identified with. Few people outside official circles associ-
ate themselves directly with gains that accrue from regionalism in terms of:
enhanced global influence through pooled sovereignty; greater political and
social security and stability; better global risk management capability; and
wider, deeper and better functioning markets. The asymmetry in the levels
at which political gains from regionalism are distributed creates major problems
because political gains at the regional level are not seen by national publics
as accruing directly to them.
The EU as a model for new regionalism demonstrates the problems
created by lacunae and lags in the evolution of key political institutions and
representative bodies at regional levels. Intended to assure democratic
accountability for development strategies, policies and governance, such
124 New Regionalism and Economic Development

institutions are credible and accepted instinctively at the national level


where they are well-established, tried, and tested. In the absence of political
union, it is difficult to establish similar institutions at the regional level with
the same degree of popular acceptance, democratic accountability and cred-
ibility. The absence of credible regional institutions exacerbates perceptions
of insufficient responsibility and accountability resulting from a ‘democratic
deficit’ at the regional level; leading to public reservations about the transi-
tion of authority and responsibility for decision-making from national to
supranational levels. The EU has yet to address satisfactorily the transitional
problem affecting the legitimacy and acceptance of political institutions at
the regional level. That problem has not been tackled by developing countries
at all, making regionalism in the developing world vulnerable to mood
swings in public sentiment because it is seen as a creation of governments
and not of people. The problem worsens when a supranational layer of
governance is grafted on at additional cost to national levels of governance
without corresponding changes (and cost reductions) in shrinking the latter.
A particular problem for ‘developmental regionalism’ is that the pace of inte-
gration depends on the pace of domestic economic and political evolution in
member countries. The train moves as fast as its slowest carriage. Most developing
countries are now undergoing major economic and political transformations.
Inevitably, these twin transitions are overstretching fragile administrative
systems and resulting in circuit overloads that impede regionalism. These often
obscure the prospect that resorting to regionalism may make economic
transitions for many developing countries easier rather than more difficult.
A second legitimate concern is about equity. In developing regions, gains
from market integration will accrue disproportionately to more industrially
advanced, larger members at the expense of smaller, less industrialized
members (cf. Tussie, Chapter 6). The former are better placed initially to
capture the immediate incremental benefits of market enlargement. Asym-
metries in the economic weights and capabilities of different member countries
contributed to the failure of first-generation RIAs. They threaten the dur-
ability of second-generation regional arrangements as well. When such asym-
metries exist (as they do in all developing regions), special redistributive
countermeasures are necessary to effect resource transfers to less advantaged
countries (cf. Hettne, Chapter 2; Gamble and Payne, Chapter 3). To ensure
that political commitment is not weakened, new regionalism needs to
incorporate mechanisms that operate automatically to equilibrate economic
gains that accrue from integration and distribute them fairly across members
in ways that accelerate the development of all, rather than strengthening
the strong and weakening the weak.

Second-generation RIAs
Post-1990 RIAs have tried to go beyond achieving the economic benefits of
integration in strengthening collective capacity for political, security and
Percy S. Mistry 125

economic risk management in an uncertain, rapidly changing world. They


are a response to an implicit transition, in departing from a nation-state
model that has, after three centuries, become dysfunctional to an as yet
unformed supranational model involving the intelligent pooling of sover-
eignty. The point of departure is clear but the destination is not. The West-
phalian model is obsolete. But nothing has yet emerged to replace it.
Changes in the nature of economic and political interactions between and
among sovereign states, along with changes in technology, in the informa-
tion and knowledge revolutions, and in other externalities, provide compelling
reasons for believing that regionalism may provide an interim platform for
coping – if only because plurilateral regional governance appears more feas-
ible and tractable at the present time than attempts at global governance
(cf. Hettne, Chapter 2; Hveem, Chapter 5). Under prevailing conditions
those would clearly be premature.
Second-generation regionalism needs to answer two key questions. First,
how should members of a regional arrangement seek to shape closer polit-
ical and economic ties taking into account the need for effective institutions
to support movement in that direction? Second, what kind of arrangements
are required to protect the interests, and accommodate the objectives, of all
members equitably when a region is characterized (as most usually are) by
one or two economically dominant anchor countries?
Ultimately, the approach taken and the choices made for integration and
its sequencing in any region are decided on political not economic grounds.
Nevertheless, it is the economic and geographical peculiarities of members
that determine the nature of arrangements that can be optimally entered
into at the beginning even if they do not, by themselves, shape regionalism
as it evolves. Those characteristics determine whether countries begin with a
mutual security arrangement (as in the case of Association of Southeast
Asian Nations, ASEAN) or with a preferential trade area before attempting a
free trade area, customs union, monetary union, economic community,
economic union or, at the final stage, full political union. For RIAs to
achieve significant intra-regional trade expansion, geographical proximity is
a necessary condition. Natural frontiers and contiguous land boundaries
that make it easy to control entry of goods and services are relevant and
material to establishing successful customs unions. In any region, the physical
features of countries determine the choice of natural partners, while their
economic characteristics determine the starting point and sequencing of
successive steps towards integration and regionalism. How quickly integra-
tion occurs and regionalism takes hold in a particular part of the world
depends on: (i) the proximity and complementarity of partners; (ii) differen-
tials in their levels of development; (iii) the extent to which their transport
and infrastructure networks are integrated; (iv) differences in their economic
and political regimes and in their levels of macro-economic stability and
adjustment; (v) the speed with which their levels of development and their
126 New Regionalism and Economic Development

fiscal and monetary policies/regimes can be expected to converge; and (vi)


social and political attitudes in member countries towards pooling sover-
eignty, beginning with trade and economics before attempting to pool it in
areas of social policy and security.

Barriers to realizing gains from regionalism in the developing world

Few RIAs entered into by developing countries between 1960 and 1990
attempted to achieve broad political and social objectives.5 Their main
objective was to increase intra-regional trade and capital flows through
reduction of tariffs, NTBs and the removal of impediments to investment
flows. First-generation RIAs did not succeed. Second-generation RIAs in
Latin America and Asia have made more headway, although that has not
been the case with RIAs in Africa, where intra-regional trade and investment
(outside of the Southern African Customs Union, SACU) remain abysmally
low.
What is clear is that tariff reductions do not have a significant impact by
themselves on stimulating intra-regional cross-border economic activity.
NTBs and institutional-cum-administrative barriers to trade, as well as those
affecting production and investment, are more significant obstacles to inte-
gration and regionalism. NTBs are less transparent than tariffs and are used
in a variety of ways, subtle and otherwise, not only to protect a particular
country’s firms and markets from global but also from regional competition.
The main NTBs that inhibit integration and regionalism are the following:
(i) monetary and payments barriers; (ii) production barriers; (iii) barriers to
investment; and (iv) other barriers.

Monetary and payments barriers


Most developing countries have inconvertible currencies that inhibit intra-
regional trade and investment. Exchange controls usually outweigh fiscal
and tariff barriers in slowing movement towards market unity. The extent to
which exchange controls impede intra-regional trade is reflected in unre-
corded trade varying from 15 per cent of recorded trade in Latin America to
75 per cent in Africa. Controls aimed at protecting unrealistic exchange
rates trigger the growth of parallel currency markets and lead to a loss of
macro-economic control on the part of governments. Even when convert-
ible, separate currencies still impose barriers to trade through high transac-
tion costs of currency conversion and exchange risk. Short of monetary
union and a single regional currency such costs cannot be eliminated,
although currency stability pacts, exchange rate mechanisms and clearing
and payments unions can reduce them. For regionalism in developing
countries to take hold, exchange rate stabilization is an indispensable first
step towards monetary union. Unfortunately, the Washington-consensus
for structural adjustment has led in the opposite direction. Members of RIAs
Percy S. Mistry 127

have been forced to resort to competitive devaluations vis-à-vis each other


to obtain short-term national competitive advantage that cannot endure
without destabilizing the regional economy and doing substantial damage
to neighbours. Monetary arrangements appropriate for developing regions
do not necessarily depend on achieving market integration first. They can
precede integration and even help to achieve it. Nor do credible monetary
unions necessarily require prior fiscal integration; although they do require
commonly agreed and respected fiscal restraints that require deficit finan-
cing to be kept under control. Such arrangements can operate as joint
regional mechanisms for ensuring adherence to conditions necessary for
maintaining convertibility and stabilizing exchange rate parities, while per-
mitting the retention of national monetary identities and, to a limited
extent, the operation of independent national credit policies.

Production barriers
NTBs affecting production reduce regional output by limiting market entry
or restricting competition. Such barriers also affect trade, but indirectly.
National standards and regulations that are different across contiguous coun-
tries have such effects on production. Coping with multiple national stand-
ards requires firms to hold larger inventories, distorts their production
patterns, discourages cross-border arrangements such as sub-contracting,
and undermines regional market unification.
Public monopolies (exercised by state-owned enterprises or parastatals) in
production, transport, trading and distribution pose another production
barrier. Parastatals are run with national objectives in mind. Their oper-
ations and activities are governed by domestic, political and social impera-
tives rather than by commercial, or regional market, considerations. They
are amenable neither to cross-border interaction with their counterparts,
nor to cross-investment in one another, as they would be under private
ownership and management. For that reason, privatization may be a necessary
prerequisite for regionalism to take hold. Without privatization it is difficult
to envisage either integration of regional enterprises in the same industry,
or greater cross-border trade between such enterprises – particularly in the
provision of infrastructure services.
The protection of national labour markets within regional arrangements
has the same pernicious effects on production. It encourages artificial real
wage and benefit differentials to become entrenched across member coun-
tries. Such protection usually results from domestic political pressures to
reduce unemployment and maintain higher standards of living than are
justified by increases in labour productivity and constrains production
efficiencies from being achieved on a regional scale. It worsens regional
competitiveness. When labour market protection is accompanied by restric-
tions on cross-border investment flows, the damage to regionalism can be
exacerbated.
128 New Regionalism and Economic Development

Small, unsophisticated and undiversified indigenous production structures


and markets in low-income countries (capable of producing only a few prod-
ucts and services tradable across borders) constrain the potential for regional
trade in industrially disadvantaged parts of the developing world (for
instance, most of Sub-Saharan Africa). In such instances, supply-side con-
straints inhibit national and regional industrialization to a greater extent
than the paucity of demand in small markets. Furthermore, insufficiently
advanced initial industrialization compromises prospects for further indus-
trialization because of its uncompetitiveness. Benefits from increased
regional competition do not materialize if similar ranges of rival products
are not already being produced under different cost conditions in different
member countries or unless there are scale economies.

Barriers to investment
NTBs affecting cross-border investment in developing regions are well known.
They include: (i) exchange and licensing control; (ii) the insufficiency of
domestic savings and the inadequacy of capital markets; and (iii) the unneces-
sary complexity and poor administration of fiscal regimes resulting in busi-
ness taxation becoming a matter of negotiation rather than being rule-based.
These barriers inhibit investment and limit the rate of growth. RIAs attempt
to overcome these barriers by encouraging FDI flows into the region and
cross-border investment (CBI) flows within the region. To the extent that they
depend on the creation of a regional market, both FDI and CBI are influenced
by the barriers enumerated above and by investment licensing. Their removal
is a precondition for exploiting gains from investment. In that connection, a
crucial issue is how trade-related investment incentives are framed under a
RIA. They affect the level and location of regionally justified investment, the
direction of trade, and the distribution of RIA benefits within the bloc.
Investment incentives under RIAs need to be provided openly, in a way
that does not result in members attempting to outdo each other in competing
for FDI and CBI nor in the effective cost of the incentives offered being
passed indirectly to consumers. If extant national incentives for investment
were adapted on such a basis, a major issue concerning the equitable distri-
bution of RIA gains could be dealt with. For genuine regionalism to prevail
members need to offer uniform incentives so that they are not competing
with each other for FDI that would come into the region anyway, or com-
peting to distort CBI flows within the region. Instead the incentives offered
should be aimed at attracting FDI into the region that would otherwise go to
other regions and to permit CBI to flow within the region without being dis-
torted by incentives.

Other barriers
In addition to NTBs that affect payments, production and investment some
barriers affect all three and impede the progress of regionalism. They
Percy S. Mistry 129

include structural adjustment and convergence, ethnicity, policy instability, the


credibility and durability of regionalism, and finally overlapping and competing
regional institutions.
In most developing regions, the stage of structural adjustment that coun-
tries are at, and the success of their adjustment efforts, are key issues in the
process of regionalization. For successful integration to occur, member
economies need to have achieved a modicum of micro- and macro-equilib-
rium. Variations in structural or sector reform schedules may affect the
speed of integration if they result in unsynchronized sequencing of trade
and exchange regime liberalization. On the other hand, fiscal and monetary
pressures generated by ongoing adjustment can result in member countries
capturing significant gains from coordination of (public) capital investment
in major infrastructure sectors. Adjustment that impels privatization can
also result in quicker regionalization of enterprises and investment in
projects of a regional scale.
Slow convergence among member countries (of fiscal, monetary, exchange
and trade regimes, investment incentives, and inflation rates) inhibits intra-
regional trade and investment. A degree of convergence among members of
RIAs across the developing world has been achieved simply by the adoption
of a uniform model of development. Conventional wisdom suggests that
RIAs can be difficult to implement when members are not at comparable
levels of development with convergent policies and regimes. When integra-
tion is attempted among unequal partners it becomes viable only when
effective compensatory mechanisms for resource transfers are in place.
Except in free-trade areas, successful RIAs in the developing world usually
require regional policy to engender equity by accelerating the development of
underdeveloped parts of the region (cf. Gamble and Payne, Chapter 3). But
focusing on regional equity considerations prematurely in negotiating RIAs
can be counterproductive if it is unclear that the RIAs in question will result
in incremental benefits that are worth sharing. For example, RIAs in Africa
have had little success in generating significant benefits because they have
been prematurely trade-focused when gains from intra-regional trade liber-
alization may have been the least significant. Approaches aimed at directing
investment flows by fiat do not induce private investors to locate produc-
tion where governments would like. Instead, they have the opposite effect.
They deter inward investment altogether. FDI prefers to avoid risk and
uncertainty and goes first to more advanced countries with larger markets
within a region. When FDI located in a region acquires more experience, a
wider dispersal of investment in less developed countries occurs to take
advantage of lower wages and other costs. Knowledgeable regional investors
may, however, behave differently from investors outside the region and be
willing to take the risk of investing in less developed members earlier
(for example, South African investors are more willing to invest in Africa
than non-African investors). Developing country RIAs need to recognize
130 New Regionalism and Economic Development

such differences and accommodate them by removing artificial barriers to


intra-regional investment as quickly as possible rather than concentrating
on competing for extra-regional investment.
Similarly, ethnicity may influence regionalism in the developing world in
profound ways. For example, in Southeast Asia the role and economic influ-
ence of the overseas Chinese community is of critical importance and value.
Yet it seems to create as many political and social problems for regionalism
in ASEAN as it does economic opportunities and solutions. Similar situ-
ations arise with the ethnic Indian communities in South Asia, East Africa
and the South Pacific, white South Africans across Africa, Germans in Eastern
and Central Europe, and US nationals in Latin America. When regional-
ization enlarges business space the perception that the incremental gains
generated might be captured by a non-indigenous ethnic group can militate
against sensible national and regional policy-making and create more tar-
geted barriers to investment and trade rather than remove them. This par-
ticular aspect of regionalism in the developing world is sensitive, intractable
and often obscured. Yet it is one that needs to be recognized and addressed
rather than being swept expediently under the carpet.
In an era of economic and political transitions and transformations, instabil-
ity of domestic policy can be a major barrier to regionalism, particularly if
such instability is associated with a region’s anchor economy (such as South
Africa in SADC, or Brazil in Mercosur). Policy instability may take many
forms. It may be caused by a fiscal shock resulting from budget laxity to
accommodate political pressures, or by a monetary or exchange rate shock
inflicted via sudden external account imbalances caused by a collapse in the
price of key exports, a surge in the price of key imports, or a sudden shock
on external debt accounts caused by global interest or exchange rate move-
ments. Because anchor economies play a critical role in supporting regional-
ization, the burdens on them and their implicit obligation to maintain
policy stability and predictability are particularly high. When stability is
threatened, decades of progress can be reversed in a matter of months. For
that reason it is essential that the building-blocks for regionalism in the
developing world incorporate in-built stabilization mechanisms that cushion
shocks and dampen the region-wide transmission of shock waves.
Realizing the potential benefits of regionalism centres on its credibility and
durability. That can only be achieved when members of RIAs are willing to
pool sovereignty in practice and not just in theory. Credibility and durability
can, however, be strengthened by associating developing country RIAs with
the involvement of developed countries in such arrangements. This means
developing regional blocs associating, and gradually integrating, with the
EU, NAFTA and Japan. To an extent this is happening. African, Caribbean
and Pacific (ACP) countries, as well as those in Eastern and Central Europe,
the Maghreb in North Africa, and in the Middle East are developing progres-
sively closer economic links with the EU under new economic cooperation
Percy S. Mistry 131

treaties. Countries and developing RIAs (such as Mercosur and CARICOM)


in the Western hemisphere are developing closer links with the United
States and NAFTA. The ASEAN countries are developing closer economic
links with Japan as well as Korea, Hong Kong, Singapore and Taiwan, which
have virtually achieved developed country status through advanced indus-
trialization. It is the stillborn regional arrangement in South Asia (SAARC)
that has not yet integrated and that is caught without sufficiently close linkages
to any of these developed market blocs.
Finally, the role of institutions in supporting the process of regionalization
and achieving the goal of regionalism is as contentious and debatable as the
role of regionalism in development. For regional integration to be acceler-
ated in the developing world, the raison d’être and functions of different
regional institutions need to be reconsidered. RIAs in developing countries
suffer from a surfeit of institutions and a deficit of integration. Several develop-
ing regions have competing, overlapping institutional arrangements all
undertaking the same activities, aimed at achieving the same goals.6 In
Africa, in particular, the degree of integration achieved appears to be
inversely proportional to the number of regional institutions established to
achieve it. There are also a number of multilateral institutions with global
functions (the international financial institutions, IFIs, the WTO, and a
number of specialized agencies affiliated to the UN) that have contributed
to the burgeoning of RIAs among developing countries, albeit with some
ambivalence. These institutions, with varying degrees of enthusiasm and
commitment, support programmes aimed at encouraging integration and
regionalism in the developing world but often at cross-purposes.
The overlapping roles and responsibilities of these different institutional
players call urgently for satisfactory resolution of institutional noise and
clutter that, more often than not, impedes rather than accelerates progress.
Institutional requirements for supporting regionalism need to be fundamen-
tally rethought and rationalized if integration in areas where RIAs are
already in force is to be strengthened, widened and deepened. Duplicated
institutional frameworks with overlapping memberships whose bureaucracies
(however small) compete for regional attention and scarce budgets while
pursuing disparate agendas confuse the issue and derail momentum towards
achieving effective regionalism.

Emerging inter-regionalism vs. intra-regionalism:


third-generation concerns

Innovative arrangements for spill-over regionalism between developing and


developed regional blocs – i.e. inter-regionalism rather than intra-regional-
ism – is the new frontier to be crossed in the twenty-first century. If successful,
that would lead to globalization being driven by functional regions that
have regained control of globalization, rather than globalization increasing the
132 New Regionalism and Economic Development

dysfunctionality of nations that have lost control. The credibility engendered


by developed–developing RIAs would remove remaining impediments to
the flow of FDI into developing countries, thus accelerating investment in
the non-OECD world naturally and more efficiently through market forces
rather than relying on official inducements that are less efficient and effective.
Meaningful integration across developed and developing regional blocs
would result in greater macro-economic stability by lowering the probability
and lessening the incidence of destabilizing financial crises arising in the
developing world (with spill-over effects) as a consequence of adjustment
failure. The global welfare gains resulting from that alone are worth capturing.
These issues need to be urgently addressed by developing countries in the
Doha Round of WTO negotiations that has been launched. The WTO global
trading regime is strongly influenced by the practices of competing trade
blocs in NAFTA, the EU, and the one that is emerging in East Asia (including
Greater China) through transfrontier corporate integration. These three
blocs account for over 90 per cent of world trade and investment. Integra-
tion within these three blocs (which have developed as well as developing
country members) is evolving rapidly. Progressive widening and deepening
is occurring within these blocs at a faster rate than within blocs that have
only developing country members. The net trade impact on the developing
regions outside these three blocs will be the result of two opposing forces. If
market unification and enlargement results in faster growth within these
three major blocs, other developing regions may benefit through increased
demand for their manufactured and service exports. On the other hand,
more efficient production within these three blocs (especially EU and
NAFTA) as a result of integration may reduce the competitiveness of imports
from outside and lower demand for them.
Whether overall demand for imports (from non-member developing
countries) in these three blocs rises or falls depends on whether the trade-
diverting competitiveness effect is larger or smaller than the trade-creating
effect of faster growth. The trade impact on any outside developing country
will depend on the evolution of its relative competitiveness vis-à-vis that of
other developing countries. In that connection newly industrialized Asian
countries have an entrenched advantage over other developing countries
because they have established a significant market share in all three blocs.
New initiatives are under way in ASEAN that will further enhance the relative
competitiveness and growing significance of member economies in world
trade. Other developing countries are also concerned about the advantage
likely to accrue to the transition economies from their preferential access to
the EU and their eventual accession to it. Similar effects may be expected to
operate in connection with FDI via investment creating or diverting effects
that accompany completion of the single market in the EU, and the
progress of integration in NAFTA and East Asia as well as in South America
and the Antipodes.
Percy S. Mistry 133

If a particular developing region does not already have entrenched access


(for such products as textiles, clothing, electronic equipment, light manu-
factures and processed agricultural products) to the EU, NAFTA or East Asian
regional markets, then it faces problems of competitiveness and market
penetration that will be difficult to overcome. In other markets, the harmon-
ization and improvement of EU standards will themselves constitute trade-
diverting NTBs to non-EU members if they do not take early steps to
respond to these market unifying initiatives. In the face of determined
moves towards closer, more effective regionalism in the three major blocs
that have already emerged to dominate the global economy, a failure to
overcome or reduce the costs of market fragmentation in laggard regions
whose countries have not yet begun to cooperate effectively (i.e. in Africa,
the Middle East, Central Asia and South Asia) will mean that these regions
will be less well placed to attract the FDI, technology and know-how on
which they will need to depend for their economic growth. Rapid progress
therefore needs to be made in these regions for them to maintain their rela-
tively modest place in the world economy. If countries in these regions
intend to take advantage of longer-term opportunities – for instance when
wage convergence in the EU and eventually in NAFTA and East Asia prompt
further shifts of labour-intensive production from their low-cost peripheries
to proximate non-member countries – then regional strategy in laggard
regions will need to be more positively shaped and vigorously pursued with
such specific opportunities in mind.

Regionalism vs. multilateralism

Why are countries, developed and developing, opting for regionalism rather
than multilateralism, especially when the institutional foundations for multi-
lateralism are in place and globalization has assumed its own dynamic?
Why are countries going for an interim solution to addressing exigent problems
rather than aiming to reach the final destination without pausing en route?
(cf. Hettne, Chapter 2; Gamble and Payne, Chapter 3; Hveem, Chapter 5;
Tussie, Chapter 6).
The answer to these questions has its roots in three related phenomena
that emerged in the 1990s: the breakdown of bipolarity; accelerating
globalization; and convergence towards a market-democracy model. In retro-
spect, the relative geopolitical stability created by concentrated bipolarity
has given way to diffused multipolarity (Mistry, 1999). That is resulting in
the devolution of littoral (regional) power by default rather than by design
in a number of regions, for instance, China in East Asia and the Pacific,
India in South Asia and the Indian Ocean, Nigeria and South Africa in Sub-
Saharan Africa, Egypt and Israel in the Middle East, Brazil in South America,
Russia in Eastern Europe and so on. In some instances, emerging powers
(for example China) are consciously asserting regional dominance through
134 New Regionalism and Economic Development

economic, political and military muscle. In others, devolution is occurring


because nature abhors a vacuum. Each twist of the global kaleidoscope now
results in a changed pattern of economic, political and security relation-
ships among nations at a pace faster than they can assimilate. That is
increasing uncertainty and risk for nation-states formerly patronized by one
superpower or other; either directly or through proxies. The systemic instabil-
ity and risk characterizing the present situation has to be managed. But the
extant multilateral system is not up to the task of containing the strains
created when these risks materialize; resulting in a quest for alternatives to
multilateralism that are tractable and reflect emerging regional realities.
Accompanying the continually changing political uncertainties that have
emerged with multipolarity, are the volatile risks being created by globaliza-
tion. That process has asserted the primacy of competitive advantage over
comparative advantage. Competitive advantage is not based, as comparative
advantage was, on endowments of static production factors (natural
resources, land, financial capital, labour) or the accumulated experience of
decades in a particular, specialized area of production. It is based instead on
dynamic factors such as: (i) control of global market share; (ii) possession of
global brands and brand equity; (iii) access to and use of sophisticated pro-
cess and information technology capabilities to control globally dispersed
production whose location can change quickly in response to changes in
exchange rates, labour costs and overhead costs; (iv) access to and control of
global media and communications; (v) an advantage in influencing global
opinions and consumption patterns through global advertising and
imagery; (vi) the ability to access, interpret and apply cutting-edge know-
ledge into new applied technologies and new products or services; and (vii)
systemic dexterity achieved through flexibility and mobility in capital,
labour and other factor markets.
These new determinants of competitive superiority are redrawing previous
patterns of global production and trade. They have critical implications for
developing countries and regions, especially as the relative share of labour
and raw material cost in the value-added to final products continues to
decline, while the share of information, knowledge and service inputs (that
is, technology, patents, advertising, marketing, distribution, transport,
packaging, financing, information, post-sale servicing, etc.) in final product/
service cost continues to rise. Structural shifts in relative costs tend to
reward nations that adjust instantaneously to changes in technology and
global market preferences, while penalizing those with inflexible factor mar-
kets, and dependent on primary exports or cheap labour. In a competitive,
open global marketplace they favour the location of production, investment
and employment in countries that adapt – i.e. those in which the costs of
continuous dislocations caused by exogenous factors can be absorbed
domestically without social or political rupture. Unprecedented global
mobility of high-level human capital, and of financial capital, results in
Percy S. Mistry 135

trade-related investment responding to and reinforcing competitiveness.


Capital flows to countries with responsive and adaptable markets for tech-
nology and labour (such as the United States and in East Asia) and away
from countries that still rely on natural resources, on a large stock of phys-
ical assets, or on human capital that does not adapt swiftly to changes in the
global marketplace.
Constantly shifting competitive advantage results in national govern-
ments being unable to maintain domestic political and economic equilib-
rium (stability) for any length of time by manipulating policy levers under
their sovereign control. Political leaders and officials find themselves unable
to cope with the domestic challenges they confront in assuring job security,
income stability or sustained increases in prosperity in the face of continually
changing external circumstances that impinge on the competitiveness of
their countries. The perception of heightened uncertainty, coupled with the
littoral diffusion of political and economic power, has led to countries looking
to their immediate neighbourhoods for safety by enlarging the space over
which policy-makers can collectively exert control and regain equilibrium.
Convergence of national econo-political regimes towards a common market-
democracy model is making that process (of regionalization) much easier
than it was when neighbouring countries, especially in the developing
world, had very different political and economic regimes, often fundamentally
incompatible.
These three phenomena go a long way towards explaining why nation-
states are turning to regionalism as a feasible risk management strategy
(cf. Hveem, Chapter 5; Tussie, Chapter 6). But why is the option of multilateralism
being eschewed? The reasons may lie in the increasing dysfunctionality of
(i) multilateralism as it is presently practised, and (ii) multilateral institutions
that have outlived their usefulness by failing to adapt their decision-making
structures adequately to new distributions of power and to new global chal-
lenges and circumstances.
Resort to multilateralism in dealing with economic and political chal-
lenges in the 1990s has proven to be inefficient, uncertain and ineffective.
Multilateralism has been ‘hijacked’ by OECD governments to protect their
interests in a world where their economic and military power is being chal-
lenged by emerging developing countries. Multilateral institutions have
become sclerotic, more concerned with protecting their institutional interests
and domains rather than evolving and adapting to address contemporary
global issues in a more effective way. In too many cases, such institutions
(especially the IFIs) have become de facto extensions of the policy-making
machinery of OECD and G-7 governments rather than catering to the interests
of all members in a genuinely dispassionate and neutral manner. Decision-
making power in these institutions shifts at too glacial a pace and remains
much too concentrated in favour of the United States and the EU. It does
not yet reflect the significant regional redistribution of global economic and
136 New Regionalism and Economic Development

political power that has occurred since 1990, especially in the growing
power of East Asia. The capacity of the multilateral system is focused more on
obstructing and resisting change, not on welcoming and accommodating it.
New regionalism is being embraced because old multilateralism no longer
works. Part of the reason for multilateralism being dysfunctional is that it
depends on interactions among nation-states that are so unequal that they
have ceased to be meaningful constituent units on which multilateralism
can reasonably rely for effective functioning (cf. Hettne, Chapter 2; Hveem,
Chapter 5). Integrating individually insignificant national units into more
influential (and more equal) regional entities may therefore be a necessary
condition for multilateralism to function more effectively. If that hypoth-
esis is validated then new regionalism may not just be conducive to a more
functional and useful form of multilateralism. It may be a prerequisite for
reconstructing multilateralism on (more equal) regional rather than (highly
unequal) national building blocks.
Given its obvious deficiencies, emerging economies in Asia, Latin America
and the Middle East (less so in Africa) are no longer constrained by the
established rules of multilateralism in deploying realpolitik to define and
achieve their national interests and regional ambitions. They are pursuing
these differently and more aggressively than before, unconstrained by the
checks and balances that existed in a bipolar world. They are unwilling to
accept the kind of multilateralism in which their growing weight is not rec-
ognized nor reflected in the shareholding and voting power of multilateral
institutions. For them, the emergence of a strong regional presence is a sine
qua non in staking their claim to become more equal partners, rather than
continuing to be patronized and remaining second or third class members
of a multilateral regime that works to obstruct their progress and to diminish
and marginalize them.
Since extant multilateralism does not work for them, developing coun-
tries are resorting to plurilateralism to tackle common concerns pragmatically
rather than ideologically. Whether this is an expedient response to the frus-
trations caused by effective exclusion from the extant multilateral regime,
or whether it reflects a more positive attempt to achieve empowerment in
the global system through collective action, remains to be seen. But region-
alism in the developing world is not simply a temporal convenience to
bypass dysfunctional multilateralism. It is unlikely to be quickly reversed. It
may, as suggested above, turn out to be an essential stepping-stone to con-
structing a different version of multilateralism based on regional blocs
rather than nation-states as the principal actors.

Conclusion

As economic integration cedes to regionalism, the analytical constructs pro-


vided by earlier theories of integration become obsolete. They need to be
Percy S. Mistry 137

replaced by a more holistic theory of regionalism. But that theory will be


some time in the making. Till it emerges the influence of regionalism on
development needs to be understood through pragmatic empiricism. That
approach makes it clear that significant economic and political gains can be
realized through regionalism in the developing world. But for regionalism
to succeed it must have a constituency that goes beyond governments and
embraces the public at large. For regionalism to take hold it must be seen as
a means of solving intractable national problems as well as enabling coun-
tries that are individually insignificant victims of ‘globalization’ to have a
meaningful collective voice in influencing its trajectory.
The case for regionalism rests on its being the most tractable risk manage-
ment strategy available to developing countries for coping with the chal-
lenges they confront in the twenty-first century. The three main forces that
influence political and economic development – multipolarity, globalization,
and convergence towards a universal market-democracy paradigm – are gen-
erating new economic and security risks and uncertainties that most develop-
ing countries cannot cope with by manipulating available national levers of
policy. Most such risks and uncertainties can be managed by developing
countries only by pooling sovereignty through limited or fully-fledged
regionalism.
Regionalism is not however a single-edged sword. It has benefits and costs
that are economic, political and societal in nature. Adroitly managed, its
benefits should outweigh the costs for all participating members. That does
not happen automatically; it has to be managed politically. Given their size,
structures and characteristics, all countries are unlikely to benefit equally
from regionalism unless the institutional and financial arrangements made
to manage regionalism incorporate mechanisms for ensuring the equitable
and proportionate distribution of the overall benefits derived from regionalism.
The world is inexorably becoming a single global market. The impact of
competition and of ever-changing competitive advantage is automatically
transmitted across national borders compelling societies and institutions to
adapt more rapidly to constantly changing global circumstances. The chal-
lenge for national policy-makers is to ameliorate and accommodate the
domestic dislocations caused by continual adjustment in a politically and
socially acceptable fashion. It is easier to accomplish that difficult task in
enlarged spaces that allow for greater efficiency and flexibility, economic-
ally and politically. Over the next few decades, regionalism offers a better
approach than either nationalism or multilateralism in the interregnum
between the era of the nation-state that is about to come to a close, and an
era of global governance that is still a considerable distance away from
materializing in effective form (cf. Hettne, Chapter 2; Hveem, Chapter 5).
Regionalism is the better option because it can be made to work more easily
and effectively than multilateralism in the short and medium term. As long
as multilateralism relies on interaction across 200 or more unequal
138 New Regionalism and Economic Development

nation-states – across which the distribution of relative power is asymmetrical –


it is likely to remain dysfunctional. Multilateralism will work effectively
when it is built on interaction among fewer regional blocs that are more
equal in economic and political size. Because extant multilateralism does
not accommodate their interests adequately, developing countries are
resorting to plurilateralism on a regional basis to manage systemic risks and
problems of common concern. That is unlikely to be a short-term expedient
subject to early reversal. Instead, regionalism across the developing world is
likely to become a stronger force over the coming decades. It will cede to
multilateralism only when multilateralism is rebuilt on foundations of
successful regionalism.

Notes
1. For customs union theory, see Viner (1950), Lipsey (1957, 1958, 1960), Cooper
and Massell (1965a, b), Johnson (1965) and Corden (1976). For a layman’s under-
standing of what is meant by trade creation and diversion in the context of RIAs,
see Mistry (1996a: 25–32). In brief, trade creation results from RIAs among member
countries when: (i) tariffs of members on imports of each other’s goods are high
prior to integration; (ii) members produce a roughly similar range of products but at
different relative prices; (iii) external tariffs on goods imported from outside the
region are relatively low and roughly at the same level across members; and (iv) firms
and industries in member countries are sufficiently flexible, responsive and com-
petitive to produce goods previously imported from outside the region at the same
or lower prices within the region. When any of these four conditions is not met,
trade diversion may occur. The extent of diversion increases with each condition
that is not met. When none of these conditions are met then losses from trade
diversion are maximized. But the gains from trade creation and diversion are not as
certain to accrue to members with the increasing globalization of production,
investment and capital flows; especially when non-regional countries have major
investments in firms and industries within the region and can capture these gains.
2. It does not capture (unorthodox) dynamic gains. Static gains have an initial (one-
time) impact on increases in intra-regional income and welfare. They occur on
the supply-side of an economy by inducing efficiencies from: (i) reallocating
resources to higher valued-added, lower-cost production; (ii) reduced transport
costs; (iii) economies of scale in investment, production and marketing; and (iv)
market expansion that results in reduced administrative and transaction costs
with the removal of distortions caused by national barriers. Static gains also
accrue on the demand-side as a result of enhanced welfare through lower prices
and greater choice for consumers within a region.
3. Mistry (1996b), for example, makes the case that structural adjustment pro-
grammes in Africa might have had better outcomes earlier had they been
designed and implemented on a regional rather than national basis. The underly-
ing reason for that assertion was that the concept of adjustment is based on mar-
kets being freed to operate more effectively and competitively so as to permit
resources to be better used. In Africa however (with very few exceptions) most
national markets are too small to be viable even if they were freed. Hence adjust-
ment has not had the impact that it was expected to based on more successful
experience elsewhere, for instance in Latin America and Asia.
Percy S. Mistry 139

4. Studies on the benefits of integration in Africa (AfDB, 1993), for example, indicate
that savings on infrastructure investment costs if infrastructure was built on a
regional rather than national basis would run into several tens of billions of US
dollars annually. These savings would dwarf present ODA flows to Africa.
5. The Association of Southeast Asian Nations (ASEAN) was an important exception.
It began life in the 1970s as a mutual peace and security organization and veered
towards becoming a broader economic community much later in the 1990s.
6. Broadly, the main public (i.e. governmental or intergovernmental) regional or
region-focused institutions fall into the following types: (i) regional secretariats,
commissions and bodies established on a plurilateral basis under a specific treaty
formalizing regional arrangements of various kinds; (ii) regional and sub-regional
development banks that are independent of specific RIA treaties and established
under their own unique charters often with the participation of extra-regional
(capital providing) member countries; and (iii) regional economic commissions
linked with the UN system. In addition, member governments of RIAs invariably
set up within their own administrative structures a ministry or sub-ministry
(department or agency) to deal specifically with regional representation and
regional affairs. To make things more complicated, each ministry has regional
working groups to coordinate policy in their area of responsibility. Mirroring
these public institutions is an array of private institutions and NGOs that also
adapt to incorporate regional dimensions and region-wide operating capacity for
collaboration, as well as for lobbying and influencing political opinion and action
on regional issues and initiatives.
8
Regional Security Complex Theory in
the Post-Cold War World*
Barry Buzan

This chapter explores the problems of using regional analysis to think


through the security agenda of the post-Cold War world. It starts with a
summary of traditional regional security complex (RSC) theory, with its
military–political focus, and its firm regionalizing logic, and looks at how
that view is still relevant in the post-Cold War world. Section 2 surveys the
changes in the nature of the security agenda, examining the rise of
economic and environmental security, with their new types of threat and
new referent objects, and the decline in salience of military–political security
issues amongst the great powers. Section 3 investigates whether three of the
‘new’ security sectors – economic, environmental, societal – contain a
regionalizing logic, and if so, how it works. Section 4 reintegrates the analysis.
It looks at the merits of treating sectors separately, or amalgamating them
into single, multi-sectoral security complexes.

Traditional security complex theory

Logic
Security complex theory was first sketched out by Buzan in People, States and
Fear (1983, 105–15; updated 1991, ch. 5). It was applied to South Asia and
the Middle East (Buzan, 1983), then elaborated, and applied in depth to the
case of South Asia (Buzan and Rizvi et al., 1986), and later to Southeast Asia
(Buzan, 1988). Väyrynen (1988) and Wriggins (1992) have applied versions
of it to several regional cases, and Wæver (1989), Buzan et al. (1990), Buzan

* This chapter is an updated version of Buzan (2000). There has not been space in the
update of this chapter (first written in 1996) to incorporate all of the new develop-
ments of regional security complex theory. Anyone wanting the full operational
version should consult Buzan and Wæver (2003). This update was written before the
US-led invasions of Afghanistan and Iraq.

140
Barry Buzan 141

and Wæver (1992), and Wæver et al. (1993) have used it to study the post-
Cold War transformation in Europe. An extensive update and application of
the theory has been made by Buzan and Wæver in Regions and Powers
(2003).
Like most other regional theory, security complexes address the level of
analysis located between individual units and the international system as a
whole. The theory posits the existence of regional sub-systems as objects of
security analysis, and offers an analytical framework for dealing with them.
Also like most other work in this area, it has been focused primarily on the
state as unit, and on the political and military sectors as the principal forum
for security relations. This framework is designed to highlight the relative
autonomy of regional security relations, and to set them in the context of
the unit (state) and system levels. One of its purposes is to provide area
specialists with the language and concepts to facilitate comparative studies
across regions, which is a notable weakness in the existing literature.
Another is to offset the tendency of power theorists to underplay the
importance of the regional level in international security affairs. This
tendency was exacerbated by the rise of neorealism in the late 1970s (Waltz,
1979), which focused almost exclusively on the power structure at the
system level. It seems reasonable to expect this bias to decline naturally with
the demise of strong bipolarity at the system level, and the advent of a more
diffuse international power structure.
The essential logic of the theory is rooted in the fact that all the states in
the system are enmeshed in a global web of security interdependence. But
because most political and military threats travel more easily over short
distances than over long ones, insecurity is often associated with proximity.
Most states fear their neighbours more than distant powers, and conse-
quently security interdependence over the international system as a whole
is far from uniform. The normal pattern of security interdependence in a
geographically diverse anarchic international system is one of regionally
based clusters, which we label regional security complexes (RSCs). Security
interdependence is markedly more intense between the states inside such
RSCs than with states outside it. RSCs are about the relative intensity of
inter-state security relations that lead to distinctive regional patterns shaped
by both the distribution of power and historical relations of amity and
enmity. The traditional definition of a security complex was a set of states
whose major security perceptions and concerns are so interlinked that their
national security problems cannot reasonably be analyzed or resolved apart from
one another.
This definition was updated to take account both of the formal switch to
constructivist method, and to move away from state-centric assumption.
The standard definition is now: a set of units whose major processes of secur-
itization, desecuritization, or both, are so interlinked that their security problems
cannot reasonably be analyzed or resolved apart from one another (Buzan et al.,
142 Regional Security Complex Theory

1998: 201). This approach sees security as socially constructed rather than
objective. What is crucial is whether securitizing actors can successfully gain
support for defining something as an existential threat requiring emergency
responses. Objective conditions may facilitate or hinder this process, but
they do not necessarily determine it. This constructivist approach to security
is set out in detail in Buzan et al. (1998, ch. 2). We argue there that such an
approach is necessary if one is to keep the concept of security coherent
while extending it beyond the traditional military and political sectors.
States may still be the main units in many regions, but they are not neces-
sarily so, and other units may be prominent or even dominant (cf. Hettne,
Chapter 2; Bøås, Marchand and Shaw, Chapter 11). The formative dynamics
and structure of an RSC are generated by the states within it: by their security
perceptions of, and interactions with, each other. Individual RSCs are durable
but not permanent features of the international system. The theory posits
that in a geographically diverse anarchic international system, RSCs will be
a normal and expected feature: if they are not there, one wants to know
why.
Because they are formed by local groupings of actors, RSCs not only play a
central role in relations among their members, they also crucially condition
how and whether stronger outside powers penetrate into the region. The
internal dynamics of a security complex can be located along a spectrum
according to whether the defining security interdependence is driven by
amity or enmity. This aspect of the theory is quite similar to Wendt’s more
recent constructivist formulation of international social structures in terms
of enemies, rivals and friends (Wendt, 1999; Buzan and Wæver, 2003:
ch. 3). At the negative end comes a conflict formation (Väyrynen, 1984),
where interdependence arises from fear, rivalry and mutual perceptions of
threat. In the middle lie security regimes (Jervis, 1982), where states still
treat each other as potential threats, but where they have made reassurance
arrangements to reduce the security dilemma amongst them. At the positive
end lies a pluralistic security community (Deutsch et al., 1957; cf. Hettne,
Chapter 2), where states no longer expect, or prepare, to use force in their
relations with each other. Regional integration (in Deutsch’s language, an
amalgamated security community) will eliminate a security complex with
which it is co-extensive by transforming it from an anarchic sub-system of
states to a single larger actor within the system. Sub-regional integration
among some members of a complex (such as the nineteenth-century unifi-
cation of Germany) can transform the power structure of that RSC.
The theory assumes that RSCs are, like the balance of power, an intrinsic
product of anarchic international systems. Other things being equal, one
should therefore expect to find them everywhere in the system. There are
two conditions that explain why an RSC may not be present. The first is
that in some areas local units are so low in capabilities that their power does
not project much, if at all, beyond their own boundaries. These units have
Barry Buzan 143

domestically directed security perspectives, and there is not enough security


interaction between them to generate a local RSC. The second condition
occurs when the direct presence of outside powers in a region is strong
enough to suppress the normal operation of regional security dynamics
among the local units. This condition is called overlay. It normally involves
extensive stationing of armed forces in the overlain area by the intervening
great power(s), and is quite distinct from the normal process of penetration
by great powers into the affairs of local RSCs. Intervention usually reinforces
the local security dynamics; overlay subordinates them to the larger pattern
of major power rivalries, and may even obliterate them. The best examples
of it are the period of European colonialism in what is now the Third World,
and the submergence of European security dynamics by superpower rivalry
after the Second World War. Under overlay, one cannot see with any clarity
what the local security dynamics are, and therefore cannot identify a local
RSC. One only knows what the local dynamics were before overlay.
Security complexes are sub-systems – miniature anarchies – in their own
right, and by analogy with full systems they have structures of their own.
Since RSCs are durable rather than permanent features of the anarchy overall,
seeing them as sub-systems with their own structures and patterns of inter-
action provides a useful benchmark against which to identify and assess
changes in the patterns of regional security. The theory offers some ability
to predict outcomes both in terms of a limited set of possible scenarios, and
expectations about external intervention.
Essential structure is the standard by which one assesses significant
change in a security complex. The three key components of essential struc-
ture in a security complex are: (i) the arrangement of the units and the
differentiation amongst them (normally the same as for the international
system as a whole, and if so not a significant variable at the regional level);
(ii) the patterns of amity and enmity; and (iii) the distribution of power
among the principal units. Major shifts in any of these would normally
require a redefinition of the RSC. This approach allows one to analyze
regional security in both static and dynamic terms. If RSCs are seen as struc-
tures, then one can look for outcomes resulting from either structural effects
or processes of structural change.
The changes bearing on any given RSC are usually numerous and contin-
uous. Power relativities are in constant motion, and even patterns of amity
and enmity shift occasionally. The key question is: do such changes work to
sustain the essential structure or do they push it towards some kind of trans-
formation? Four broad structural options for assessing the impact of change
on an RSC are available:
Maintenance of the status quo means that the essential structure of the local
complex – its differentiation of units, distribution of power, and pattern of
hostility – remains fundamentally intact. For this outcome to occur does not
mean that no change has taken place. Rather, it means that the changes
144 Regional Security Complex Theory

which have occurred have tended, in aggregate, either to support, or else


not seriously to undermine, the structure.
Internal transformation of a local complex occurs when its essential struc-
ture changes within the context of its existing outer boundary. Such change
can come about as a result either of decisive shifts in the distribution of
power, or of major alternations in the pattern of amity and enmity.
External transformation occurs when the essential structure of a complex is
altered by either expansion or contraction of its existing outer boundary.
Minor adjustments to the boundary may not affect the essential structure
significantly. The addition or deletion of major states, however, is certain to
have a substantial impact on both the distribution of power and the pattern
of amity and enmity.
Overlay means that one or more external powers move directly into the
regional complex with the effect of suppressing the indigenous regional
security dynamic. As argued earlier it is quite distinct from the normal
process of penetration by great powers into the affairs of RSCs.
One can argue about the correct interpretation of the dividing lines, but
one cannot just use the term ‘regional security complex’ on any group of
states (Norden, the Warsaw Pact, the Non-Proliferation Treaty members).
There has to be a distinctive pattern of security interdependence that marks
the members of a security complex off from other neighbouring states. And
this pattern has to be strong enough to make the criteria for inclusion and
exclusion reasonably clear. Thus, there is a European security complex but
not a Nordic one (because Norden is part of a larger pattern of security inter-
dependence), a Middle-Eastern complex, but not a Mediterranean one
(because the Mediterranean states are parts of several other regional complexes).
South Asia is a clear example of a security complex centred on the rivalry
between India and Pakistan, with Burma acting as border towards the
complex in Southeast Asia, and Afghanistan delineating the border with the
Middle East complex. The theory provides a set of descriptive concepts that
can be used to frame comparative studies. It is predictive in that it contains
hypotheses which set out expected relations between regional and global
levels, and which limit the likely changes that any given region can
undergo. The theory is prescriptive to the extent that it identifies appropriate
(and inappropriate) realms for action, and suggests a range of states of being
(conflict formation, security regime, security community) that can serve as
frameworks for thinking about policy objectives.

Relevance in the post-Cold War world


During the period of European imperial dominance, the international
system was largely overlaid. Indigenous regional security dynamics surfaced
significantly with decolonization, but were heavily influenced and pene-
trated by the superpower rivalry. Post-Cold War RSCs have become a prominent
feature of the international landscape, for better or for worse, with more
Barry Buzan 145

latitude for their own dynamics than during the Cold War. With the super-
power rivalry gone, there is a more regionalized international security order.
In the absence of overriding powers and system-spanning ideological rivalries,
a more decentralized pattern of international security is allowed to operate.
Two factors explain the relative prominence of the regional level of security:
the diffusion of power, and the relative introversion of the great powers.
The sources of power have become much more widely diffused throughout
the system. The Europeans/West achieved their extraordinary global control
because they possessed at least three assets not possessed by the other actors
in the system: the political form of the national state, the knowledge and
productive power of the scientific and industrial revolutions, and the firepower
of modern weapons. All of these assets, as well as the mobilizing power of
nationalism and ideology, have been thoroughly, if still very unevenly,
spread throughout the international system by decolonization and industri-
alization. The result is a huge closure in the gap of power differentials that
reached its widest point during the middle of the nineteenth century.
On top of this, and perhaps partly as a result of it, the major centres of
power in the international system are all notably introverted. After the Cold
War, none of them is willing to take on a strong leadership role in inter-
national society, and all of them are preoccupied with their own domestic
affairs. The United States still plays some leadership role, but lacks a mobilizing
crusade, and if not exactly returning to its isolationist traditions, is taking a
much more self-interested, unilateralist and restricted view of its interests
and obligations. The extraordinary sensitivity of the country to military
casualties is one hallmark of its disengagement, as is its antagonism to the
United Nations and overseas aid, and its recent spate of rejections and
renunciations of international agreements. The ‘war on terrorism’ following
the atrocities of September 11 represents a very specific US engagement and
not a general reassertion of leadership (cf. Hettne, Chapter 2; Falk, Chapter 4).
The European Union (EU) has been cast prematurely into a great power
role and has not yet even developed adequate machinery for a common
defence and foreign policy. Although one of the economic giants, it is too
beset by problems of its own development, and pressing issues in its imme-
diate region, to be able to play a leadership role globally. Japan is in some
ways similar: an economic giant, but as yet almost lacking the internal capability
for a robust international role commensurate with its power. Like the EU, it
fails to meet Bull’s criteria that a great power be: ‘recognised by others to
have, and conceived by their own leaders and peoples to have, certain
special rights and duties . . . in determining issues that affect the peace and
security of the international system as a whole’ (Bull, 1977: 202; also cf.
Gamble and Payne, Chapter 3).
Against this scenario of a regionalizing world, it could be argued that
military–political issues in general have declined sharply as the main
component of security, an issue we will explore in section 2. If true, it would
146 Regional Security Complex Theory

bring into question the relevance of security complex theory to the post-
Cold War world. One approach to this problem is to ask whether regional
logic also works in the newer security sectors. This is the burden of section
3. Another is to point out that although the military–political agenda has
certainly lost much of its relevance amongst the great powers, it is alive and
well in many other parts of the international system. Remember that RSCs
can be constructed by relations of both amity and enmity. Security interde-
pendence can be both positive and negative, and on this basis the military–
political agenda remains widely relevant. A quick survey of the present
international system suggests that the traditional politico-military model of
a security complex retains much relevance. This is most obvious in the
Middle East, South Asia, Central Asia, East Asia, large parts of Africa, and the
former Soviet Union (FSU). It is less obvious for EU-Europe (though still
relevant in the Balkans sub-complex), and North and South America. Some
regions, most notably Europe, Southern Africa and Southeast Asia, benefited
from the withdrawal of Cold War rivalries. In other places, the unleashing
of regional relations has exposed zones of conflict, as in the Balkans, the
Caucasus, and parts of Central Asia. Elsewhere, as in South Asia and the
Gulf, zones of conflict that were apparent during the Cold War have continued
essentially unchanged by the ending of the Cold War. These reflect strong
indigenous conflict dynamics, and although the ending of the Cold War has
affected patterns of alliance and arms supply, it has not basically changed
the character or intensity of these conflict formations.
One of the big regional questions is about the fate of East Asia (Buzan and
Segal, 1994). For the first time in modern history this region is largely free
from domination by foreign powers. It is composed of several powerful
states in varying degrees of industrialization. Levels of power are rising
dramatically, the distribution of power is subject to significant change, and
nationalism is strong. The region has few and mostly weak international
institutions, though the Association of Southeast Asian Nations (ASEAN)
has constructed a successful security regime in the Southeast Asian sub-
region, and through the ASEAN Regional Forum (ARF) extended this into
Northeast Asia. It also has a host of historical enmities, border disputes and
cultural divides, some very serious (China–Taiwan, the two Koreas, the
South China Sea). Rising levels of arms expenditure were moderated by the
post-1997 economic crisis, but several countries have the means to become
nuclear weapons states quickly if need be. To a Western eye, East Asia bears
some disturbing resemblances to nineteenth-century Europe, with China in
the role of Germany as the large, centrally positioned, rising, and poten-
tially hegemonic power, and Japan in the role of Britain, as the offshore
advanced industrial country trying to sustain a policy of splendid isolation
and global focus. If such structural similarities count, then one would
predict the emergence of a balance of power based RSC, albeit one mediated
by nuclear deterrence, and susceptible to whether the United States decides
Barry Buzan 147

to remain engaged in the region, or reduce its security commitments there.


Alternatively, we might be seeing the re-emergence of a modern form of
classical Chinese suzerainty, in which its neighbours perform various
degrees of kowtow to Beijing’s regional leadership. These scenarios are
rejected by those who argue that the parallel with Europe is false, that
Asians have their own transnational way of dealing with things, that
economic rationalism will support a common commitment to development,
and that the United States will stay in the region as the military–political
ring holder and balancer (Richardson, 1994/5; Mahbubani, 1995). Either
way it is clear that the military–political dimension of security remains central
in East Asia.
There are, therefore, good reasons to think that regional security complex
theory remains highly relevant in the post-Cold War world, in terms of both
new and old conflict formations, and in terms of new and old security
regimes and security communities. This remains true notwithstanding that
regional security represents an essentially territorial perspective, and can
thus be attacked by the deterritorializing logic inherent in the globalization
literature. Certainly there is increasing concern about a range of deterritorial
security issues ranging from transnational crime to the global environment.
Since the events of September 11, ‘international terrorism’ has moved to the
top of this list, yet even here territorial logic remains strong (cf. Falk, Chapter 4).
In many of its organizational aspects, such terrorism shares the trans-
national qualities of organized crime: network structures that penetrate
through and around both state structures and the patterns of regional and
global security. Its new and incredibly ruthless methods of mass suicide
attacks and random biological assaults seem, inter alia, purposely designed
to dissolve the key assumption of RSC theory that the transmission of
threats (especially threats of force) is generally and closely linked to
distance. Yet also like organized criminals, ‘international’ terrorists often
have territorial ‘home’ bases. Distinct from crime, the agenda of terrorists is
often closely locked into both domestic (Irish, Basque/Spanish, Israeli,
Afghan) and/or regional (Middle Eastern) politics, and the links between
those levels and the global one. Despite the transnational quality of its
methods and organization, bin Laden’s Al Qaeda network is intimately tied
into the dynamics of the Middle Eastern RSC, and the interplay of those
dynamics with the global level. Although there may well be a kind of
globalist element in Al Qaeda’s securitization (a resistance of the worldwide
faithful against the global cultural assault of capitalism), this does not seem
to be the main motive. Much more prominent in their discourses of securi-
tization are the placement of US forces in the ‘holy lands’ of Saudi Arabia, and
US backing for Israel (generally, as a ‘crusader’ invasion of Islamic territory;
specifically, as the oppressor of the Palestinians). Thus while Al Qaeda
manifests itself as a deterritorialized, transnational player, neither its existence,
its operation, nor its motives can be understood without close reference to
148 Regional Security Complex Theory

both the regional structures of security and the interplay of these with the
global level. International terrorism of the type, and on the scale, unleashed
since September 11 does unquestionably strengthen the non-territorial
aspect of security. But it is not separable from the main territorial dynamics,
and it is nowhere close to replacing them as the prime structuring principle
of international security. Its biggest impact may well be to change not only
the security dynamics within the Middle Eastern and South Asian RSCs, but
also the relationship of both of these to the United States, and the relation-
ship of the United States to the other great powers. That would be no mean
accomplishment, but it would amount to changes within the underlying
territorial structure of international security, not a transformation of it.

Shifts in the security agenda

Elements of the new security agenda emerged well before the Cold War
ended. The decline of military–political security issues at the centre of the
system was visible in the growing awareness that war was disappearing, or in
some cases had disappeared, as an option in relations amongst a substantial
group of states. The core group of this emergent security community was
Western Europe, Japan and North America. The effectiveness of nuclear
deterrence between East and West made it possible to think that the Soviet
Union could also, in an odd way, be included in this sphere, an outlook that
became much stronger once Gorbachev assumed power and embarked on
an explicit demilitarization of the Cold War. After the Vietnam War, there
was also an increasing tendency in the West to question whether war was a
cost-effective method for achieving a wide range of political and economic
objectives. If war was fading away as a possibility amongst many of the leading
powers in the system, then realist assumptions about the primacy of military
security became questionable.
Adding to this question was the increasing securitization of two issues
that had traditionally been thought of as low politics: the international
economy and the environment. Issues become securitized when leaders
(whether political, societal, or intellectual) begin to talk about them – and
to gain the ear of the public and the state – in terms of existential threats
against some valued referent object. The securitizing formula is that such
threats require exceptional measures and/or emergency action to deal with
them. Securitization classically legitimates the use of force, but more
broadly it raises the issue above normal politics and into the realm of ‘panic
politics’ where departures from the rules of normal politics justify secrecy,
additional executive powers, and activities that would otherwise be illegal
(Wæver, 1995; Buzan et al., 1998: ch. 2). It is not possible in this chapter to
unfold these two issue areas in any detail, but the general development was
as follows.
Barry Buzan 149

In the case of the environment, the securitization process can be traced


back to the 1960s, when books such as Carson’s Silent Spring (1962) first
began to make people seriously aware that the growing impact of humankind
was transforming the natural environment from being a background
constant into a foreground variable. Starting from a concern about pesti-
cides, this grew steadily into a wide range of interconnected issues including
climate change, biodiversity, resource depletion, pollution, and the threat
from meteorites. The underlying problem was a combination of rising
human numbers and rising industrial activity within a finite planetary
ecosystem. Concern was split between a potentially arcadian desire to secu-
ritize the environment itself, to preserve things as they had been before
humans disturbed them, and a more pragmatic worry that if humans
exceeded the carrying capacity of the ecosystem in too many ways, they
would endanger the supporting conditions of their own prosperity, civilization,
and possibly existence. There was also a growing awareness that nature itself
could still deliver huge blows against humankind whose density and urban
concentration made it increasingly vulnerable to major disruptions of trade
and production (Matthews, 1989; Homer-Dixon, 1991).
In the case of the economy, the securitization process arose in part from the
relative economic decline of the United States, and in part from reactions to
the increasing liberalization of the world economy. Relative American decline
was an inevitable result of both the exaggerated position of global dominance
that it held in 1945, and the imperial overstretch that set in with the Vietnam
War. US dominance was challenged both by Europe and Japan recovering
from the Second World War, and by some newly decolonized countries find-
ing effective paths to modernization. By the 1970s some in the United States
were already beginning to feel threatened by dependence on imported oil, by
trade deficits, and by pressure on the dollar. Alongside US decline was the
growing liberalization of the global economy, first in trade, and from the
1970s also in finance. This meant that national economies became progres-
sively more exposed to competition from other producers in a global market,
and to ever more powerful transnational corporations and financial markets.
The whole idea of economic security in a capitalist system is fraught with
contradictions and complications, not the least being that actors in a market
are supposed to feel insecure: if they don’t the market doesn’t produce its
efficiencies (Luciani, 1989; Buzan, 1991: ch. 6; Cable, 1995). Nevertheless
concern did focus on a range of specific issues:

• the ability of states to maintain independent capability for military


production in a global market;
• the possibility of economic dependencies within the global market
(particularly oil) being exploited for political ends;
• fears that the global market would generate more losers than winners,
and that it would heighten existing inequalities both within and
150 Regional Security Complex Theory

between states (manifested at the top of the range by US fears of decline,


and at the bottom by developing country fears of exploitation, debt
crises and marginalization); and
• fears that the international economy itself would fall into crisis from
some combination of weakening political leadership, increasing protec-
tionist reactions, and structural instability in the global financial system.

It was often difficult to separate the attempts to securitize economic issues


from the more general contest between liberal and mercantilist approaches
to economics. During the Cold War the superpower rivalry muted protec-
tionist voices because of the overriding common military and political
security concern that all of the capitalist powers shared against the Soviet
Union. So long as the Soviet threat existed, the capitalist states worried
more about it than about the commercial rivalry among themselves.
When the Cold War finally unravelled at the end of the 1980s, these
underlying developments were thrown into prominence by the rapid
collapse of virtually the whole global level military–political security agenda
that had dominated the world for over forty years. As the Soviet Union first
withdrew its military and ideological challenge, and then imploded, the
political–military rationale of the Cold War security system evaporated.
With the ideological confrontation consigned to history, nuclear forces
suddenly had little to deter, and conventional forces little to contain. But
offsetting this positive development was the loss of the common interest
that had kept the capitalist economies together despite their rivalry. The
image of a ‘new world disorder’ (Carpenter, 1991; Nye, 1992) began to
dominate perceptions of the future, bringing with it a new security agenda.
In the space available it is impossible to attempt an exhaustive tour
d’horizon of the new security agenda. Much of it anyway remains contro-
versial, for we are still far from consensus on what can and cannot legiti-
mately be designated as a security issue or a referent object. There is, for
example, strong resistance in some quarters to securitizing economic and
environmental issues (Deudney, 1990; Walt, 1991; Cable, 1995). A good
case can also be made that business firms by their very nature do not generally
succeed in becoming referent objects of security however much they would
like to do so as a way of escaping the rigours of the market. Some very large
firms and banks can be exceptions to this rule (Buzan et al., 1998: ch. 5).
What can be clearly observed is that the state is less important in the new
security agenda than in the old one. It still remains central, but no longer
dominates either as the exclusive referent object or as the principal embodiment
of threat, in the way it did previously. A range of new referent objects for
security and sources of threat is being set up above, below and alongside the
state. Above the state one finds being elevated to the status of referent
objects of security such things as the set of rules, regimes and institutions
that constitute the liberal international economic order (LIEO); the global
Barry Buzan 151

climate system; and the various regimes that attempt to control the prolifer-
ation of weapons of mass destruction (the non-proliferation treaty [NPT],
the chemical weapons convention [CWC], and the missile technology
control regime [MTCR]). Alongside the state, nations and religions have
emerged as distinct referent objects (Wæver et al., 1993). Below it, the rising
focus on human rights supports claims to give individuals more standing as
the ultimate referent object for security (Shaw, 1993; McSweeney, 1996). At
the same time, the sources of threat are also diversifying away from the
state. Many of the new threats seem to stem from complex systems both
natural and human-made, and the operation of these systems is often
poorly understood.
What the security priorities are will also depend on how a number of
intrinsically unpredictable things work out. For example, some scientists
argue, on the basis of drill cores from the Greenland ice cap, that serious
climate change in the past sometimes occurred with great swiftness, major
changes in temperature (and therefore in glaciation and sea level) occurring
within a few years. If they are correct, then current observations such as the
breakup of some Antarctic ice sheets could put environmental security at
the top of the global agenda very soon. If they are wrong, environmental
issues could remain on the margin, consisting of particular countries or
regions with particular problems: sea flooding in a few very low-lying countries;
water sharing in the Middle East; nuclear accidents in Europe, and suchlike.
The same could be said about the international economy: if it spins into a
major crisis then it will be a central security issue, but if ways are found to
overcome or contain crises, and keep the system tolerably stable, then most
economic issues will remain off, or marginal to, the security agenda. Many
of the new security issues could become major, but they could just as well
remain marginal, or of high concern only to a few actors.
Unless events take a turn which pushes some issue to the centre of global
security concerns, there is a good case for thinking that the new security
agenda will be considerably less monolithic and global, and considerably
more diverse, regional and local, in character than the Cold War one,
despite the global quality of many of the new threats and referent objects.
Although there will be some shared issues, in the post-Cold War world the
security agenda will vary markedly from actor to actor in terms of both the
issues and the priorities.
For security analysts, one major problem raised by this diversification of the
security agenda is whether the logic of security analysis must become simi-
larly diversified. Traditionalists such as Walt (1991) and Chipman (1992)
complain that such fragmentation leads to intellectual incoherence. Must
each sector have its own security logic – economic, environmental, societal,
political, military – or do they overlap and combine in some way? This larger
problem has been addressed elsewhere (Buzan et al., 1998: chs 1, 8, 9). For this
chapter we need to investigate only in terms of the logic of regions.
152 Regional Security Complex Theory

Regional logic and the ‘new’ sectors

The logic of interaction and interdependence that creates regional security


complexes as typical military–political formations within international
anarchies is clear and well understood. Is there a similar regionalizing logic
in the economic, environmental and societal sectors? If there is, does it
produce the same regions as military–political logic, or different ones?

Economic
On the face of it, one would not expect to find a strong regional security
logic in the economic sector. In most parts of the modern world, the costs of
moving goods and money around the planet are so low as to have substan-
tially eroded distance as a factor in economic relations. In some places local
clusters of resources, industry and markets still make sense, but with
conspicuous exceptions such as Canada and Mexico, most states have
economic relations with distant parts of the world that are equal to or more
significant than those they have with their neighbours. The main contem-
porary feature of the international economy is the globalization of markets,
and not only for commodities, but also for finance and labour. Under these
conditions, it is less and less true that threats travel more easily over short
distances than over long ones. Coffee producers in Africa look to rival
producers in Latin America, and to commodity markets in London and
elsewhere, to find threats. Security concerns focus on one’s competitiveness
within the global marketplace, and on the overall (in)stability of the global
financial and trading systems. A major shrinkage in global credit, or a break-
down of the rules on trade, would create a severe system-wide crisis in the
world economy. There are also more day-to-day security concerns about the
dark side of the liberal world economy such as the trade in drugs, arms,
banned chemicals, and nuclear technology and materials, and the flourishing
of criminal mafias that engage in these trades, and most of these concerns
also reflect global patterns. There is little in the nature of any of these
dynamics to suggest that the territorializing logic of regions should be a
conspicuous feature of economic security.
The increasingly global focus of economic security means that its system
level structures (the market, the trading system, the financial system), and
the institutions associated with them, are rising in status as referent objects
(those entities in whose name security can be evoked). This contrasts with
the discourse in the political sector, where, although various regimes and
institutions can become referent objects, the anarchic structure as such is
almost never invoked in this way (even though the obsession with national
security implies support for anarchic structure). When economic systems,
whether abstract markets or concrete intergovernmental organizations
(IGOs), are constructed as referent objects of security, the question of what
constitutes an existential threat can only be answered in terms of the principles
Barry Buzan 153

by which such systems are organized. The LIEO is existentially challenged


by anything that threatens to unravel the commitments to remove border
constraints on the international movement of goods, services and finance.
More subtly, it is also threatened by the development of monopolies, which
undercut the rationales of competition and efficiency that underpin the
system. The LIEO thus lives in permanent tension with impulses towards
both protectionism and monopoly. To the extent that these gain ground,
the LIEO is diminished, and eventually extinguished. The same logic applies
to IGOs, and this gives a key link to the regional level. In the economic
sector, something like the EU can be existentially threatened by whatever
might unglue the rules and agreements that constitute its single market.
Yet despite the strength of globalism, one does indeed find strong empirical
evidence for economic regionalism. There seems to be a firm connection
between concerns about the security of the LIEO, and securitizing dynamics
at the regional level. Economic regionalism (Anderson and Blackhurst,
1993; Helleiner, 1994) has come back into fashion as a result of the widening
and deepening of integration in the EU since the late 1980s, and the
construction of the North American Free Trade Agreement (NAFTA)
(cf. Tussie, Chapter 6). The most ambitious of these, the EU, trundles onward
despite all of its difficulties, and has unquestionably become the central
focus of security in Europe (Buzan et al., 1990; Wæver et al., 1993; Buzan and
Wæver, 2003: ch. 11). These two regional projects at the core of the global
political economy have spawned both imitators (AFTA, in Southeast Asia,
APEC linking Australasia and North America, Mercosur covering the Southern
cone of South America) and much discussion about other regional
economic zones (ECOWAS in West Africa, SADC in Southern Africa, the CIS
covering the former Soviet Union). East Asia is a puzzling case, with some
interpreting it as lacking formal economic regionalism (and therefore
vulnerable) and others seeing it as developing a distinctive informal,
transnational model of regional integration.
Given the low cost of transportation and communication, economic
regionalism looks to be a peculiar development, especially amongst the
most advanced industrial economies. Given the intrinsic mobility of so
many economic factors it would in purely economic terms make as much
sense for Britain to be linked with North America or Japan as to be part of
the EU. The geographic element of economic regionalism is worrying to
liberals because it seems to go counter to the efficiencies of a global market,
and worrying to strategists because it has echoes of the neomercantilist
blocs of the 1930s that were forerunners to the Second World War. This
parallel with the 1930s seems misplaced. The contemporary economic blocs
are very different in crucial ways from those of the interwar period. They are
voluntary rather than imperial and coercive, they are not motivated by rival
ideologies or a desire for military self-reliance, and because capital is now
substantially internationalized, they do not represent rival national capitals.
154 Regional Security Complex Theory

The possibility for fascist-style political coalitions between national capital


and nationalist political parties has been greatly reduced by the internation-
alization of capital represented by multinational companies (Busch and
Milner, 1994). In addition, the possibility of war amongst the great powers
is constrained not only by nuclear deterrence and an understanding of the
lessons of history, but also by an absence of imperial will or logic. If there is
a move towards regional blocs they will have quite liberal internal trading
structures, and there will still be substantial managed trade amongst them.
Thus while they do not point, as in the 1930s, towards preparation for
war, these contemporary blocs do have political and security elements. They
are cultural defence mechanisms against the powerful homogenizing effects
of open markets. Economically, they are attempts to build stronger operating
platforms from which to engage in the ever more intense trade and financial
competition in the global market, while trying at the same time to reduce
the pressures of an open global economy without sacrificing all economies
of scale (cf. Hettne, Chapter 2; Gamble and Payne, Chapter 3). And they are
fallback bastions in case the global liberal economy succumbs to the effects
of weak management, financial turbulence, intensifying trade competition
and/or the effects of international terrorism and the measures against it.
They can also be seen as attempts to reduce the overstretched management
demands of an open global economy by moving some of them to a more
intimate regional scale (cf. Hveem, Chapter 5; Tussie, Chapter 6). In strictly
economic terms, economic regionalism is not so much about security as
about the politico-economic logic of competition within a global market.
The security element in these ‘economic’ regions is more to be found in
political and cultural concerns.
Liberals like to think of the global market as, ideally, a place of uniform rules
and universal logics of behaviour. But one aspect of economic regionalism may
be culturally based. As Helleiner (1994) points out, the three main economic
groupings all have quite distinctive characters. Europe is heavily institution-
alized and driven by social democratic values. North America is lightly institu-
tionalized and reflects liberal values. East Asia relies mostly on transnational
links and reflects national development values. It could well be that part of
contemporary economic regionalism is based in the desire to preserve politico-
cultural values. In the case of Europe, strong institutionalization reflects the
political security project of preventing a return to Europe’s self-destructive bal-
ance of power past. In this perspective, Islamic economies might eventually
qualify as a separate type with regionalizing tendencies. At least in the banking
sphere, Islamic norms and principles are fundamentally different from capitalist
ones (it is, for instance, forbidden to calculate interest over loans). When
Islamic and capitalist economies relate to one another it might be like IBM and
Macintosh computer systems: compatible rather than hostile, but not without
permanent translation costs. The difference might contribute to regionalization
(higher economic interdependence among the users of the same system).
Barry Buzan 155

One can conclude about the economic sector that it does contain some
regionalizing logic, mostly in reaction to the hazards of the dominant
globalizing dynamics. But political and cultural factors also play a strong
role in what at first sight appear to be economic regions. In security logic,
there is often a strong cross-linkage between the economic and other sectors
(Buzan, et al., 1998: ch. 5).

Environmental
As in the economic sector, the logic of environmental issues does not point
strongly towards regionalization, but here that logic is more plainly
reflected in the empirical world. Regional logic builds on the greater intensity
of interaction among neighbouring units, and environmental issues do not
always, or even often, work that way. The environmental agenda presents
an extremely diverse set of causes and effects. Some of them are to do with
nature impacting on human civilization, others with the impact of civiliza-
tion on nature, and the possible return loops from that on the sustainability
of civilization. Some things with global causes (CFCs in the atmosphere)
have local effects (ozone holes at the poles). Some global causes have global
effects (warming, and sea level rises). Some local causes have local effects
(many forms of pollution). And some local causes have much wider effects
(nuclear accidents).
Most of the mainstream issues on the environmental agenda do not
work according to the geographical logic of regions. Global warming, for
example, is in one sense a global phenomenon, but its impacts are very
unevenly distributed. That unevenness does not take regional form. All
low-lying states would be adversely affected by global warming and its
associated rises in sea level, but these do not form a regional group
(Bangladesh, Netherlands, Maldives, Egypt). Some states might benefit
from some global warming, for examples those with extensive territory
now under permafrost (Canada, Russia), but here again there is no
regional logic.
Regionalizing logic only comes into play in the environmental sector if
either (i) a geographically coherent group of actors behave in such a way as
to create a common problem in their own environment, or (ii) an environ-
mental impact with causes elsewhere happens to encompass a region. The
first condition arises most easily in relation to water: seas, lakes, river
systems, aquifers. It may be to do with water shortages and problems of
distribution (Israel–Palestine; Nepal–India–Bangladesh; the Euphrates
valley; the Aral Sea), or with pollution (the Mediterranean Sea, the North
Sea, the Gulf region), or possibly with fisheries management. It could also
arise over some types of air pollution (problems of sulphur dioxide in
Europe). Regional impacts with external causes, such as the ozone holes, are
hard to foresee, and would require detailed knowledge of how complex
physical systems operate.
156 Regional Security Complex Theory

So the environmental sector does contain a weak regional logic, but


only in relation to certain kinds of issues. There is no overall reason to
expect environmental issues to manifest themselves primarily or even
strongly in regional form, though they may sometimes do so. In addition,
the standing of environmental issues as matters of security is also under
serious question (Deudney, 1990). Although some of the rhetoric of the
environmental agenda is cast in security terms, in fact the substance of the
debate is mostly about political and economic issues. Environment as a
security issue is not yet widely enough accepted either by governments or
by public opinion to be unquestioningly incorporated as a legitimate part
of the security agenda.

Societal
In the societal sector, the logic of security relations bears some similarity to
that in the military–political one, and so regionalization should be expected
(Buzan etal., 1998: ch. 6). Like military and political threats, threats to identity
(migration, competing identities) mostly travel more easily over short
distances than over long ones. The question is whether they produce the
same regions or different ones from those in other sectors. Some types of
global threats, most notably that of cultural Westernization, come in global
form but have distinctively regional impacts. Thus the Middle Eastern
Islamic world, and the East Asian world, both generate responses of threat-
ened identity in response to the pressures of Westernization (and especially
Americanization). An offshoot of this is the unease with which Europe and
Islam face each other across the Mediterranean, and the moves in the
former to restrict immigration from the latter.
In the more conventional sense, the dynamics of societal security can
generate regional formations out of interactions amongst neighbouring
units. The ethnic conflicts that have torn apart former Yugoslavia are an
obvious example, and one can find many similarly territorialized ‘tribal’
conflict formations in Africa (Sierra Leone/Liberia; Rwanda/Burundi/DRC/
Uganda; Angola), the Caucasus (Armenian/Azeri) and South Asia (Tamils/
Sinhalese; Hindu/Muslim; Sikhs; etc.). Although having a similar structure
to traditional security complexes, those rooted in the societal sector may
well be rather smaller in scale, often occurring within the boundary of a
state, or across the boundaries of a small number of states. In Europe and
Asia, the main patterns of identity issues often line up fairly closely with the
state structures. Although some minority issues do exist (Tibet, Basques,
Hungarians), societal security in these regions corresponds quite closely to
the military–political pattern.
Thus in contrast to the economic and environmental sectors, the global
logic in this sector is quite weak. There is a strong regionalizing logic, but
where this does not line up with the pattern of inter-state security relations,
it is often on quite a small scale.
Barry Buzan 157

Reintegrating sectors: regional security post-Cold War

Taking into account the wider agenda of security, and the particular charac-
teristics of security dynamics in the new sectors, what does the logic of
regional security in the post-Cold War world look like? How, in other words,
does one tackle the question of regions when there are potentially different
region-forming dynamics at work in the different sectors? There are two
ways of approaching this question. One assumes that the different sectors
are operationally distinct, the other that they are aggregated.
If we assume that the sectors are distinct, then a complicated world of
different but overlapping RSCs emerges. Alongside the traditional, state-based,
military–political RSCs one would have to place other regional formations
deriving from economic, societal and environmental logics. In some cases,
these would be based on different units (nations, IGOs, firms) though often
the state would also be a key player. While interactions amongst states
continue to define military–political complexes, in the societal sector the
units will be nations and other identity groups not necessarily represented
by a state. In the environmental sector regions may not be unit-based at all,
but come from the operation of complex physical systems. These different
logics do not necessarily, or even probably, line up. In East Asia, for
example, one finds a conflict formation or a weak security regime in the
military–political sector, but only a faint regional dynamic in the economic
sector, and a semi-regional concern about Chinese minorities in the societal
one. In Africa and North America, societal dynamics are mostly substate in
scale, operating within and between the state structures. Many environmental
dynamics operate on a completely different logic from the other sectors,
and thus generate patterns with little connection to those in the other
sectors. In exceptional cases some or all of these patterns might somehow
line up to give a kind of layer-cake coherence, but there is no reason to
expect this to happen in any systematic way. Taking sectors as always
distinct would, in effect, mean carving Security Studies up into several
separate disciplines.
This fragmentation would only be a problem if regional dynamics in the
different sectors were in fact strongly separate and distinct. There may
indeed sometimes be good analytical reason to focus on the specific regional
dynamics within a particular sector. Occasionally, one might even find a rel-
atively pure single-sector RSC. But as a rule, this is not the case, and taking
this approach would amount to imposing the excessive neatness of an
analytical scheme onto the densely interwoven realities of international
relations. There are at least three good reasons for thinking that an amalgam-
ated approach will be the most appropriate for regional security analysis
in a multi-sectoral security environment. First is the natural overspill
between sectors, second is the way that policy-makers tend to integrate
issues into a single security picture, and third, in some places, is the existence
158 Regional Security Complex Theory

of regional institutions that will try to make issues fit within their own
geopolitical framework. Taken together, these three factors work powerfully
to amalgamate the dynamics of different sectors.
The first amalgamating force is the natural overspill between sectors. The
idea of sectors is essentially analytical: views of the same whole through
different lenses (Buzan et al., 1993: 30–3). It is a way of picking apart compli-
cated wholes in order to understand them more easily. But although the
four social sectors do have distinctive logics (the same ones that define the
corresponding academic disciplines), they cannot be separated operationally.
Politico-military, economic and societal dynamics all operate in close rela-
tionship with each other. Trade and finance require political order. State
structures both depend on identity for stability, and easily pose challenges
to existing identities. Culture and politics both affect, and are affected by,
economic activity. This linkage is particularly clear in the economic sector,
where what on the surface appears to be economic regionalism is in fact
substantially driven by political and cultural motives: what seems to be
economic security is in fact about political stability, military power, or
cultural conservation. The same logic of linkage and overspill also applies to
the environmental sector, even though its dynamics are rooted in the physical
world. Many environmental issues link strongly to both economics (costs of
pollution control) and society (landscape and identity). If it is useful to
unpack the sectors in order to get a clearer view of their dynamics, it is still
necessary to put them back together again to get the whole picture. Only
rarely will one find a single sector security dynamic that does not overspill
significantly into other sectors – or is overspilled into by them.
Nor is there any reason to think that the dynamics of mutual threat
perception will always, or even normally, take place within the confines of a
single sector. It is true that traditional regional security complex theory
generally assumed such sectoral coherence: that military threats would be
countered by military threats. But in a more diverse security environment
cross-sectoral patterns are both possible and likely. The Baltic states, for
example, might feel threatened by Russian military power, while Russia feels
threatened more societally by various forms of discrimination against
Russians living in the Baltic states. Syria and Iraq may feel threatened envir-
onmentally by Turkey because of its control over the headwaters of the
Tigris and Euphrates rivers, whereas Turkey feels threatened politically by
Syrian and Iraqi provision of safe havens for its dissident Kurds. Parts of the
Islamic world feel culturally threatened by the West, but the West is more
concerned about terrorism. Parts of the Third World feel economically
threatened by the West, but the West is more concerned about migration
and environmental threats coming the other way. Much of the reality is
thus one of threat dynamics crossing over sectoral boundaries.
The second amalgamating force is the way that policy-makers tend to
integrate issues into a single security picture. Partly for institutional reasons,
Barry Buzan 159

and perhaps partly for psychological ones, security policy-making works in


an integrative way. This is most easily seen in the effects of established
patterns of amity and enmity. Where neighbouring states or peoples already
perceive each other as hostile, as in many parts of the Middle East, then
environmental issues (water), societal ones (minorities), and economic ones
(oil production and pricing) are much more likely to become securitized as
part of the overall package. Thus Iraq treats Kuwaiti oil policy and Turkish
dam-building as security issues, choosing a military reply to the former.
Bahrein treats Shi’ites as an Iranian fifth column, and Syria, Turkey, Iran
and Iraq all weave the Kurdish minority problem into their already difficult
political relations. Where relations are more friendly, as within the EU, then
such issues are much less likely to rise above the merely political. Water-use
problems on shared rivers like the Rhine and the Danube may be serious but
they do not generally even get considered for securitization. While enmity
will tend to amalgamate securitization across sectors, amity will tend to
amalgamate desecuritization.
The third amalgamating force is regional institutions that try to make
issues fit within their own geopolitical framework. In Europe, the EU represents
a strong institutional attempt to make the sectors line up. Thus a security
community in the military political sector is coextensive with both an
economic union and (to a lesser extent) a meta-identity project. Where such
institutions exist, they will naturally integrate sectors. While the EU is easily
the most developed of such regional formations, similar but weaker forces
are at work in ASEAN, SAARC, SADC, Mercosur, NAFTA and several other
regional institutions.
If amalgamation across sectors is the rule, then the best general approach
to regional security in the post-Cold War world will be to think in terms of
more heterogeneous complexes than we did in the past. Rather than basing
regional security complexes purely on the state, one will need to allow in
other types of actors and referent objects as well. In looking at the Balkans,
for example, one clearly has a strong mixture of politico-military and
societal dynamics. Some of the actors and referent objects are states, but
some of them are mobilized ethnic groups. A similar picture could be found
within the new regional system(s) emerging from the wreckage of the Soviet
Union. Elsewhere the mix might be different. In the Gulf and East Asia, the
traditional state-based, military–political dynamics remain strong, but
societal actors and issues also play a role, as do economic ones. In this
approach one retains the analytical simplicity of a single form of RSC, albeit
at the cost of an expansion, perhaps considerable in some cases, of the
variety of issues and actors within it.
9
A Region-Building Approach*
Iver B. Neumann

A post-structural approach to regions insists on working on the inside of the


concepts which are already in circulation in the extant literatures. I take as
my example the Northern region of Europe, a region that has been defined
and redefined time and again through history, and whose identity was
brought clearly into play after the end of the Cold War. The analysis shows
that each actor tries to impose a definition of the region which places the
actor as close as possible to its several cores. These cores are both territorial
and functional, and the way to take hold of them goes through manipula-
tion of knowledge and power. The point here is not in any way to treat
these actors as sovereign, however, but rather to acknowledge that, after the
fall of the sovereign actor in politics and the sovereign author of regions,
actors and authors are still thick on the ground (Neumann, 1997).
These actors engage in what, by analogy to nation-building (Anderson,
1983), one may refer to as region-building. A region-building approach is
nothing more than the application of a self/other perspective to the prob-
lematique of the literature on regions. It could be argued that the nation-
state simulates the archetypal principle for political organization: that of
kinship. In a situation where the kinship structures themselves are of less
and less political importance, the nation-state takes on the hyper-real qual-
ity of the simulacrum: the metaphorical family of the nation-state becomes
more real than the family itself. If the nation-state’s reality in space is testi-
fied to by its territory, its reality in time is a question of getting itself a his-
tory. That a nation-state is constructed from historical material which may
never have existed or whose relevance is dubious, does not necessarily
detract from its reality, once it is territorially bounded. It does, however,
throw its reality and thus identity in time into serious doubt. When an elite
has formulated a political programme which hinges on the existence of
some nation, it is always possible, admittedly with more or less difficulty, to
construct a prehistory for it, and thus embody it in time as well as in space.
This is done by identifying, and thus making relevant to the identity of the
human collective in question, a host of political ties, cultural similarities,

* This chapter builds on Neumann (1994) and two other applications of the perspec-
tive (Neumann, 2001a; 2001b). I thank Halvard Leira for research assistance.

160
Iver B. Neumann 161

economic transactional patterns and so on. Of course, such a political process


will always be imposed on a geographical area which is already, in a number
of respects, heterogeneous. The point made here is simply that these similarities
and dissimilarities are processed politically by nation-builders, and that these
political actors are the ones to decide which similarities should henceforth be
considered politically relevant, and which should not.
The region-building approach simply suggests that such insights should
be applied not only to nations, but also to regions. It is a largely neglected
fact in the literature that regions are also imagined communities. The existence
of regions is preceded by the existence of region-builders. They are political
actors who, as part of some political project, see it in their interest to imagine
a certain spatial and chronological identity for a region, and to disseminate
this imagination to a maximum number of other people. It is not suggested
here that each and every aspect of nation-building is replicated on the
regional level. To mention but two obvious differences, region-builders may
not always, or only exceptionally, see the forging of a region as a prelude to
the forging of a political entity; nation-builders, on the other hand, do so by
definition. Furthermore, in the sense in which it is used here, region-building
implies the crossing of state borders, so it is entangled with the question of
state sovereignty in a different way from that of nation-building.
A genealogical analysis of social phenomena pioneered by Nietzsche,
orchestrated by Foucault and extended into the field of international rela-
tions by Ashley, Der Derian and others, is a major source of inspiration for
the present analysis. Since the ambition is to suggest a specific approach to
a set of specific phenomena, namely regions, perhaps this is the time to
be more specific about what this inspiration entails. As set out by Ashley, a
genealogical tack

involves a shift away from an interest in uncovering the structures of history


and toward an interest in understanding the movement and clashes of
historical practices that would impose or resist structure. . . . a genealogical
posture entails a readiness to approach a field of practice historically, as
an historically emergent and always contested product of multiple practices,
multiple alien interpretations which struggle, clash, deconstruct, and displace
one another. (Ashley, 1987: 409–10; also Foucault, 1977)

In the case of regions, it is actually possible to prop up this insistence on


the existence of a power/knowledge nexus by means of etymological evid-
ence which supports a conceptualization of regions as military theatres or
battlegrounds:

certain spatial metaphors are equally geographical and strategic, which


is only natural since geography grew up in the shadow of the military.
A circulation of notions can be observed between geographical and
162 A Region-Building Approach

strategic discourses. The region of the geographers is the military region


(from regere, to command). (Foucault, 1980: 140)

Regions, then, are defined in terms of speech acts, and of other acts
(Shapiro, 1981). But instead of postulating a given set of interests that actors
are supposed to harbour before their social interaction with other collectives,
the region-building approach investigates interests where they are formulated,
namely in discourse. Where every region-builder’s goal is to make the
region-building programme as natural as possible, the approach aims to
expose its historically contingent character. Where a region has been part of
a discourse for so long that it is taken as a given fact, the approach can show
that structures which may at first sight seem to be inevitably given, will
only remain so as long as they are perceived as inevitably given.
Lastly, a region-building approach is not offered as an attempt to place
the study of regions on an entirely new footing. It does not aim to crowd
out what are arguably the two dominant approaches in the existing litera-
ture: an inside-out approach focusing on cultural integration and an out-
side-in approach focusing on geopolitics. Rather, it is offered as a
perspective from which to dot the margin of the ongoing debate by asking
questions about how and why the existence of a given region was postu-
lated in the first place, who perpetuates its existence with what intentions,
and how students of regions, by including and excluding certain areas and
peoples from a given region, are putting their knowledge at the service of its
perpetuation or transformation. Bearing this in mind, I now turn to a dis-
cussion of what the two dominant approaches in the IR literature have
made of Northern Europe, in order to use the region-building approach to
criticize and supplement their findings.

Inside-out/outside-in: a continuum of approaches

The extant literature, diverse as it is when it comes to pinning down the


main dynamics which characterize a given region, can nevertheless be
arranged along a continuum, at the extreme ends of which theorists con-
centrate wholly on factors either internal or external to the region.
Analyses which are predominantly inside-out typically try to amend the
wooliness of regional borders by postulating a centre, a core area where the
internal defining traits are more similar, and interaction more intense, than
in the regional periphery. Russett’s (1967: 182) standard work on regions
concludes along these lines. Where Northern Europe is concerned, the core
area would be Denmark, Norway and Sweden. Indeed, in those three coun-
tries, the term ‘Scandinavia’ is used to cover these three states only, while
the term Norden (the Nordic region) is used to include the periphery as well.
This ambiguity is reflected in English usage, where ‘Scandinavia’ can denote
either area.
Iver B. Neumann 163

Russett’s work is but one example of how integration theory places itself
squarely towards the inside-out end of the continuum. In the 1950s,
Deutsch et al. (1957) proposed a threshold score for internal cultural and
transactional variables, beyond which the region in question turns into
what he calls a security community. For Deutsch, Nordic cooperation is an
example, in fact the example, of a pluralistic security community – that is,
one where the institutional strategies of state formation or supranational
cooperation have not been at work. According to Deutsch, then, the common
cultural traits of the Nordic region have in themselves been strong enough
for the region to transcend international anarchy (see also Etzioni, 1965,
particularly pp. 220–1).
Similarly, in his standard work on Nordic integration in the post-war
period, Sundelius (1982) identifies the societal level as the source of regional
dynamics. However, instead of explaining institutionalization in terms of
spill-over, which is a mechanism that is not necessarily dependent on cul-
tural similarity, he highlights the culturally determined similarity of the
way in which regional elites perceive the extra-regional environment.
Sundelius’s analysis is still mainly inside-out. Its focus is not internal fac-
tors seen in isolation, however, but rather internal elite perceptions of the
region’s external environment. This line of attack can, arguably, also be
found in the literature on the ‘Nordic balance’. At first glance, the idea
seems to give priority to outside factors. Arne Olav Brundtland and the
other authors behind it wanted to describe, as it were, the sum total of Nordic
security policy orientations, to name the alleged Nordic strategies for maxi-
mizing leeway vis-à-vis their respective allies and partners, and to explain
why the great powers did not increase their presence, and thereby allowed
the Nordic region to keep its characteristic low level of tension compared to
the rest of Europe. The classical formulation of the idea defines it as

the notion that the stability of the Northern European area is a result of
reduced great power involvement, and that comparable possibilities exist
for both the United States and the Soviet Union to neutralize possible
increased involvement by the other superpower, thus removing incen-
tives for initiatives leading to increasing tensions in Northern Europe.
(Brundtland, 1966: 30)

For Nordic peace researchers, to criticize the idea of a Nordic balance has
been something of a professional rite de passage. Their endeavours have
resulted in a reading of this literature that places it closer to the inside-out
end of the continuum than to the outside-in end. For example, Wiberg and
Wæver interpret it as

a system of political dissuasion, a balance of unexploited options; and


in a slightly idealized version, the theory is about how Norden (and
164 A Region-Building Approach

especially Norway) kept the superpowers out by elegantly using it . . . [The


idea] has dissuaded the superpowers from increasing their military pres-
ence in Norden, because of the knowledge that such an increase would
lead to a corresponding move from the other superpower. (Wiberg and
Wæver, 1992: 24)

Readings that foreground the action–reaction character of the idea,


and readings that stress its character of being primarily part of domestic dis-
course, will place it on either side of middle of the continuum. This area is
also populated by Cantori and Spiegel’s framework for comparing regions.
Their suggestion is to divide all regions, or what they in the jargon of 1960s-
style systems analysis insist on referring to as ‘subordinate systems’, into a core
and a periphery. ‘The core sector’, they write, ‘consists of a state or a group
of states which form a central focus of the international politics within the
region’ (Cantori and Spiegel, 1970: 20, quote de-emphasized). They then go
on to add the influence of the international system, the relevant Gestalt of
which they refer to as ‘the intrusive system’, to the internal dynamics
within the region itself.
This double pincer movement, whereby regions are concurrently
approached in terms of dynamics working inside-out and outside-in, is further
elaborated by Buzan and others in the literature on what they refer to as
‘security complexes’ (cf. Buzan, Chapter 8; see Hettne, Chapter 2). According
to Buzan, ‘[i]n defining regional security, the principal element that must be
added to power relations is the pattern of amity and enmity among states’
(Buzan, 1991: 189). These patterns, he goes on, exist ‘within some particular
geographical area’, presumably the region. The states that make up the
region and are the bearers of these patterns, together form a security complex:
‘A security complex is defined as a group of states whose primary security
concerns link together sufficiently closely that their national securities cannot
realistically be considered apart from one another.’1 Regional developments
are predicated on the nature of the security complex, as well as the extent to
which the global rivalry of the great powers manifests itself within the
region.
Closer to the outside-in end of the continuum, there is a sizeable litera-
ture where the interests and interaction of the great powers relevant to the
region take centre stage. Whereas the inside-out approaches operate with a
plethora of different regional actors – international NGOs (INGOs), nations,
states, bureaucracies, parties, commercial enterprises, trade unions, cultural
personalities – the outside-in literature tends to stress systemic factors,
states, and geography.2 Where the former tend to see regional cores as being
constituted in terms of cultural factors and therefore single out Denmark,
Norway and Sweden, the latter stress geopolitical factors. For example, Holst
(1973: 1) sees the Scandinavian peninsula (Norway and Sweden) as well as
Finland as the regional core. Similarly, where the inside-out approaches
Iver B. Neumann 165

concentrate on the naturalness of cultural criteria in delineating a region’s


borders, the outside-in approaches discard these in favour of natural geopol-
itical strategic landmarks such as mountain ranges, rivers and stretches of
water.
Most great power military planners seem to see regions almost exclusively
in these terms. One instructive example is a memo written by a certain captain
Ottley, Secretary to Her Majesty’s Committee of Imperial Defence, in 1905,
upon the consequences of the imminent break-up of the union between
Sweden and Norway:

Once in possession of Sweden and Norway, Russia would be in a position


to hermetically seal the Baltic entrances and, in alliance with Germany,
might be expected to make short work of Denmark . . . In the opinion of
the Admiralty the right course for Great Britain to pursue will be to
endeavour to prevail on the French Government to renew, together with
ourselves, our ancient guarantee of both the Scandinavian States, not
merely against Russian, but against any foreign aggression. (The National
Archives, CAB 17/59)3

Ottley views the affairs of Denmark, Norway and Sweden as being clearly
interrelated, a fact which is due to geographical proximity and the possible
thrusts of penetration from Russia and Germany (and, one might add, from
Great Britain itself). To geopolitical pioneers such as Rudolf Kjellén, the
working of this great power triangle was indeed the drama of Scandinavian
politics (Kjellén, 1905).
The literature reviewed so far, although rich in insights and diverse in
assumptions, can nevertheless be criticized for sharing a major oversight.
Although it focuses on regions as entities whose contents and borders are in
a process of change – the major disagreement is indeed over how change
occurs – the existence of a region is taken as a given. The nature and causes
of the genesis of regions is treated as a priori. The best way to show up this
blank spot may be to examine what is arguably the most useful of the
approaches mentioned above, namely Barry Buzan’s combination of inside-out
and outside-in factors in the theory of security complexes.4
The security complex is represented as ‘an empirical phenomenon with
historical and geopolitical roots’, and represents a ‘durable rather than per-
manent’ pattern (Buzan, 1991: 191). Buzan acknowledges that the empirical
side of his argument ‘courts the charge of reification’, but nevertheless goes
on to state that ‘[t]he reality of security complexes lies more in the individual
lines of amity, enmity and indifference between states, than in the notion
of a self-aware subsystem’. In other words, the construct does not assert its
authority as an ‘imagined community’, a cognitive construct shared by
persons in the region themselves. Rather, it is the construct of one man –
the allegedly sovereign author. ‘The individual lines of security concern can
166 A Region-Building Approach

be traced quite easily by observing how states’ fears shape their foreign
policy and military behaviour’, Buzan (1991: 191) maintains.
The blank spot here is whose region Buzan is talking about. The most
remarkable feature of his definition of a security complex as ‘a group of
states whose primary security concerns link together sufficiently closely that
their national securities cannot realistically be considered apart from one
another’, is the absence of a subject (Buzan, 1991: 190). Cannot realistically
be considered by whom? To Buzan, the delineation of regions, understood
as security complexes, is a technical question which ‘may be a matter of
controversy’. The politics of defining and redefining the region is therefore
marginalized. The idea of security complexes, like all the other ideas about
regions discussed above, makes assumptions about what a region is. This is
an inherently political act, and it must therefore be reflectively acknow-
ledged and undertaken as such. Buzan, Wæver and de Wilde’s reworking of
the definition to read ‘a set of units whose major processes of securitization,
desecuritization, or both, are so interlinked that their security problems can-
not reasonably be analyzed or resolved apart from one another’ (see Buzan,
Wæver and de Wilde, 1998: 201; Buzan, Chapter 8) is a step in the direction
of answering this critique, because it acknowledges that a wider set of agencies
is relevant to the general question. However, the new definition does not
answer the critique as such.

Approaches applied: one region, two narratives

This section will attempt to illustrate how one may put the two sets of
assumptions towards the ends of the inside-out outside-in continuum to
work, and construct two widely differing narratives of the Northern Euro-
pean region.
A generalized narrative of the Northern European region predicated on
inside-out style assumptions would begin by elaborating the communal
nature of the region’s culture and history. From 1389 to 1523, the region
was actually politically united in the Union of Kalmar, and for three centur-
ies after that, Denmark and Norway remained one political entity. Through-
out this period, the entire region was characterized by close cultural and
economic contacts. Indeed, the idea of political reunion was mooted at a
number of occasions, and received support from a wide array of societal
groups from the late eighteenth century onwards.
The Scandinavianist movement was particularly active in the first half of
the nineteenth century, and laid the foundation for the intensification of
cooperation towards the end of the century. For example, 1873 saw the
forging of a Scandinavian currency union, which had gradually grown into
a monetary union by 1901. In 1905, the Union of Sweden and Norway
broke up in a peaceful and orderly fashion, an occurrence that is still almost
unique in European and indeed world history. Furthermore, the League of
Iver B. Neumann 167

Nations’ most successful staging of peaceful conflict resolution took place in


the Nordic region, where Finland and Sweden negotiated an agreement on
the status of the Åland island in 1921. Again, the Permanent Court of Inter-
national Justice in the Hague passed its perhaps most wide-ranging ruling
subsequently adhered to, over conflicting Danish and Norwegian claims to
sovereignty over Greenland in 1933. Finland moved closer to the core of the
region throughout the 1930s; after all, the area had a history as part of Sweden
before its incorporation into the Russian empire in 1809. After the inception
of state sovereignty in 1917, the common cultural heritage proved itself to
have survived as a lasting tie to Scandinavia.
Following these and other events, the formation of the Nordic Council in
1952 was the logical next step for Nordic cooperation, and one which was
foreshadowed by a Danish proposal of 1938. The intensification of the
informal Nordic societal networks and transgovernmental telephone diplo-
macy, as well as successes such as the common labour market, the passport
union and the streamlining of social law, are seen as further evidence of the
instrumental role of cultural regional homogeneity, which is further evi-
denced by the shared egalitarian ‘Scandinavian welfare state model’.
Although this model is closely associated with the Scandinavian social
democracy, it is argued that the model has transcended its social origins and
become a part of the shared regional culture.
A tendency to compare the Nordic region favourably to the European
Communities (EC) was a stock ingredient of much inside-out writing during
the Cold War. Two factors were brought to the fore: the prevalence of societal
actors, and the absence of formal agreements.
In such a view, the absence of formal agreements to prop up Nordic
cooperation only goes to show its moral superiority compared to the EC then,
and the European Union (EU) and other regional fora now. Between friends
there is, as it were, no need for legislation; it is adequate that sovereign gov-
ernments reach informal consensus, and that they then proceed to implement
the decisions reached through national parallel action (Nielsson, 1990). This
is a very solidarist, indeed Burkean, view of international relations generally
and international law specifically, and therefore well suited to round off this
generalized inside-out narrative of the Northern European region.
The contrast between this narrative and one rooted in outside-in assump-
tions, where regional developments are traced back to changes in the inter-
national and European order, is indeed striking. To start with, whereas the
inside-out narrative would tend to treat the region as something that was
there from the beginning of written history, it is hard to see how to generate
a meaningful outside-in perspective for the period before the beginning of
the eighteenth century. There are two reasons for this. First, it was arguably
only as a result of the Thirty Years’ War (1618–48) that the states system
around the Baltic Sea merged with the system focusing on Continental
Europe, and thus ceased to be a highly self-contained entity in terms of
168 A Region-Building Approach

security. It is only from then onwards, therefore, that it is at all meaningful


to cordon it off as an ‘inside’ vis-à-vis an ‘outside’. Second, it was only when
Russia replaced Sweden as the dominant Baltic power that the region
became the object of the characteristic triangular power struggle between
Russia, Germany and Great Britain. Before that, Sweden’s status as a great
power in the European states system at large, tenuous though it may have
been, placed its immediate territorial surroundings on a par with other parts
of the system.
The triangular outside rivalry changed the face of the Northern European
region during the Napoleonic wars. Following Tilsit, Sweden had to cede
Finland to Russia. In order to somewhat compensate Sweden for its loss and
thereby solidify Russia’s hold on its new acquisition, Tsar Alexander
I decided that Sweden should be given the Norwegian part of Denmark/Norway.
In this he obtained the support of the other great powers. Norway duly
changed hands.
The potency of outside-in factors become especially visible during wartime.
The next war that had an impact on the region was the Dano-Prussian war
of 1864. It effectively finished off Scandinavianism by showing that regional
cooperation broke down when outside factors impinged on the different
Scandinavian countries in different ways. Where the event of Norwegian
sovereign statehood in 1905 is concerned, the outside Russian and German
support for the Norwegian cause as a means of softening the region to great
power pressure was important.
During the First World War, the Scandinavian states shared an interest in
keeping the warring great powers at bay, and in compensating for the loss of
trade with the combatants by increasing trade between Denmark, Norway
and Sweden themselves. After the Great War, however, the old patterns of
trade quickly reasserted themselves. This can be taken to indicate that
Scandinavian cooperation had no internal dynamic, but was rather a spurious
and therefore ephemeral side-effect of the uncertainty concerning the Euro-
pean balance of power. The conclusion can be bolstered by highlighting
events that took place during the Second World War. At this time, Sweden
not only failed to react to the German occupation of Denmark and Norway
in 1940, but even went as far as to open its borders to regular Nazi troop
transports. The number of transits made exceeded two million.
Ever since the Napoleonic wars and also in periods before that, Denmark
and Sweden had been non-aligned states, and since 1855, the neutrality of
Sweden/Norway had been guaranteed by France and Great Britain. Norway
and Finland also settled for non-alliance after obtaining sovereign statehood
in 1905 and 1918, respectively. However, the different experiences of each
during the Second World War changed this picture radically. In 1948, Finland,
although non-aligned, entered into a Treaty of Friendship, Cooperation and
Mutual Assistance with the Soviet Union, Sweden remained non-aligned,
whereas Norway and Denmark were among the founding members of the
Iver B. Neumann 169

North Atlantic Treaty Organization (NATO). Given the external environ-


ment and the different ways in which the states reacted to it, attempts to
form a Nordic Defence Union backed by the regional great power Sweden
floundered. The setting up of the Nordic Council in 1952 was, moreover,
only possible as a low politics venture which compensated for the failure of
high politics cooperation. The common interest in alleviating great power
pressure remained key.
The Nordic region, then, could serve as a rhetorical alternative as well as a
modest supplement to the closer ties to external great powers which followed
as a result of changes in the shape of the international system. Finland
needed Nordic cooperation as a counterweight, however modest, to the
pressure from the Soviet Union ensuing from lost wars and the existence of
the friendship treaty. In Norway, Nordic cooperation was seen as a way of
giving profile to regional policy and thus alleviating and complementing
the heavy dependence on the strong Sea Powers, Great Britain and the
United States.
In Denmark, bilateral relations with Germany continued to play a crucial
role. This explains not only post-war developments, but also the lack of
revanchist demands against the defeated neighbouring state after the First
World War – the internal factor of domestic nationalist clamouring for a
reoccupation of Schleswig notwithstanding – and for the consiliatory policy
ensuing after five years of German occupation during the Second World
War. To Denmark, then, Nordic cooperation was a way of balancing the
immediate great power neighbour south of the border.
These two narratives of what characterizes the Nordic region do indeed
differ substantially. It is hardly surprising that different assumptions about
the prevalence of inside-out versus outside-in factors give rise to differences
in emphasis and conclusions. Since different assumptions may be chosen to
illuminate different aspects of regional politics, however, the two perspect-
ives and their concomitant narratives are complementary rather than
mutually exclusive (cf. Hettne, Chapter 2).

Whose region?

Because of its affinity to the literature on nation-building, the region-building


approach immediately reveals one crucial insight left out by the inside-out
and outside-in narratives. The Scandinavianism that arose towards the end
of the eigtheenth century and had its heyday towards the middle of the
nineteenth was not only a bona fide example of a region-building movement,
but also a direct competitor to less territorially inclusive nation-building
projects in the area. Like the nation-building projects, the goal of imagining
a Scandinavian community was served by the production of knowledge.
From the 1830s onwards, there arose a Scandinavianist historiography, and
attempts were made at standardizing language throughout the proposed
170 A Region-Building Approach

region (Børresen, 1991; cf. Deletant and Hanak, 1988). There existed an
intellectual elite with a Scandinavianist programme which was in a number
of cases not only region-building, but also state- and nation-building. However,
the project suffered a severe setback when in 1864 Sweden–Norway did not
make good on vague promises of support for Denmark in the war against
Prussia and Austria.
At this time, moreover, the Norwegian nation-building project was gath-
ering momentum. In 1905, the success of this project resulted in the
breakup of the personal union with Sweden. Scandinavianism succumbed
to the interests of the already existing states, and to the Danish, Norwegian
and Swedish nation-building projects. It survived, however, as a region-
building project with a number of traits reminiscent of a nation-building
one.
The fate of Scandinavianism presents a good illustration of the region-
building point that cultural similarities are not politically relevant in and of
themselves, but must be politically processed to become so. The political
elites of Christiania, Copenhagen and Stockholm were much closer to one
another culturally than were town and countryside within any one state.
Inside-out approaches to regions would lean towards seeing this as an indi-
cation that the Scandinavian project would emerge victorious from its
struggle with the national projects. What happened was the exact opposite.
What was politically communicated as culturally relevant (such as Finnish
lakes, Norwegian mountains, Danish phlegmatism) proved more important
for political organization than cultural similarities per se.
The participation of the Swedish–Norwegian state in the region-building
project during the run-up to the Dano-Prussian War was no isolated phe-
nomenon. Already in 1794, the Swedish ambassador to Paris summed up his
view of the Scandinavian states (Sweden and Denmark–Norway at that
time) by stating that ‘in short, everything which draws them together, is
natural. Everything which pulls them apart, is unjust and unnatural’ (Erik
Magnus Stäel von Holstein, cited in Børresen, 1991: 14). The question
posed by the region-building approach would be: whence this interest in
Scandinavia? Sweden had been historically dominant in the region ever
since the end of the Thirty Years’ War. It tended, and still tends, to see Fin-
land, Norway and to some extent Denmark, not only as a buffers against the
Atlantic Powers, Russia/USSR and Germany, but as an extension of the self.
In its post-great power existence, Sweden was able to hold onto Finland
until 1809 and to dominate the personal union with Norway lasting from
1814 to 1905. When Sweden made a virtue of necessity and declared itself
non-aligned after the Napoleonic wars, one of the benefits, especially in the
post-Second World War system, was the opportunity to launch itself as a
moral great power and an actor with a clear profile. The state’s profile was
accentuated by the existence of what was seen as a uniquely Swedish welfare
state, whose example could inspire other countries to manoeuvre between
Iver B. Neumann 171

unmitigated market liberalism on the one hand, and a Soviet-type economy


on the other. The uniqueness of the Swedish model – which was, instruc-
tively, referred to as the ‘Scandinavian’ model in the other Scandinavian
states – did not, however, keep Sweden from continuing to see the region in
terms of continuation of self. A telling line in the Swedish national anthem
goes ‘I want to live, I want to die in Norden’, that is in the Nordic region, and
not in Sweden as one might expect in a national anthem.5 Perhaps there
exists a general tendency for regional great powers to identify the region
with their own sphere of interest.
Of course, the region-building approach could be used to highlight not
only the intentions and strategies of societal movements and self-professed
regional great powers, but of any actors partaking in regional politics
(cf. Bøås, Marchand and Shaw, Chapter 11). For example, it was mentioned
above how a 1905 brief from the British Admiralty on ‘the threatened dissol-
ution of the Union between Norway and Sweden’ made a good example of
an outside-in analysis. The region was seen as a wrestling ground for external
powers, where Britain would try to secure its interests by prevailing on the
French government ‘to renew, together with ourselves, our ancient guarantee
of both the Scandinavian States, not merely against Russian, but against any
foreign aggression’ (The National Archives, CAB 17/59).
The region-building approach could add a few comments in the margin of
this analysis. First, the ‘ancient’ guarantee in question, presented as proof of
Britain’s ‘natural’ role in the region, was but 50 years old at the time when
this was written. Second, the way in which the British officer states the
problem in the paragraph preceding the one just quoted is illuminating:
‘the idea that the kindred Norse race should ever fall beneath Muscovite
domination is repugnant’. The key word here is ‘kindred’, by means of
which it is once again presented as natural that Great Britain should take
charge of the situation – indeed, that Great Britain should not only be in the
region, but that it is also in some sense of the region.
This mood of presentation keeps emerging in the statements of other
great powers with an interest in the Nordic region. During the German
occupation of Denmark and Norway during the Second World War, it was a
recurrent theme that Germans and Scandinavians were of the same, Aryan
race. And during a meeting with Nordic ministers, the Russian Prime Minister
Kosygin is reported to have asked rhetorically: ‘Is not really the Soviet
Union a Nordic country?’ (quoted in Berner, 1986: 2).6 These ways of defining
a state as part of the region in question share common structure. First,
the insistence that the state in question is ‘really’ part of the region. Then,
the conclusion that this fact should ‘naturally’, and if possible exclusively,
be given a special droit de regard by ‘the other’ powers in the region.
With the waning of the Cold War, the clash of interpretations of the Nordic
region was thrown out in the open for all to see. The upheaval in the
international system changed the cast of actors in the struggle to define
172 A Region-Building Approach

the region. The situation invited the actors to overhaul and renew their
armoury, and test out new strategies.
The Cold War should not, however, be seen as a truce in the fight between
different definitions of the region. To reiterate some of the examples given
above, the Soviet Union launched an unceasing campaign to define it in
such a way that its own inclusion was secured. Denmark, Finland, Norway
and Sweden tried to entrench it as an area of ‘low tension’ compared to the
rest of the European region. The existence of the rivalling region-building
projects of the European Free Trade Association (EFTA) and the EC fed into
the struggle to define the Nordic region. When EFTA lost out in its struggle
against the Community and Denmark went and joined it in 1972, the
resulting overlap between the EC and the Nordic region had, among other
things, the effect of strengthening Denmark’s hand in the struggle for Norden.
The lively struggle during the Cold War notwithstanding, its discontinu-
ation raised the heat of battle by several degrees. The EC’s presence loomed
larger than ever. The Soviet Union’s demise as a global power caused it
to renew its interest in Europe, including Northern Europe. Before long,
programmes for a ‘renewal’ or ‘transformation’ of the Northern European
region cropped up everywhere.

Regions and imagined centres

A number of these programme took the Baltic Sea as their geographical base,
and were presented under labels such as the new Hanse, the Baltic Sea
Region, Mare Balticum, the Euro-Baltic Region and the Scanno-Baltic Polit-
ical Space. A tightly knit epistemic community of ‘Nordic’ foreign policy
intellectuals played a conspicuous role in producing the knowledge that was
used to prop up these several ideas. Their battle-cry was that under present
post-modern conditions, state sovereignty is relativized in favour of a new
European mediaevalism where different political issues are settled on differ-
ent political levels (cf. Gamble and Payne, Chapter 3).
Finally, like all other region-building projects, this one does not only try
to impose its own definition of the region, but also to fend off rivalling
projects. The ‘Baltic discourse’, Joenniemi writes,

should not be made ‘realist’ in a traditional sense trying to prove that


cooperation around the Baltic rim fits the (narrowly conceived) security
needs of the actors in the region. (Joenniemi, 1991: 3)

The pledge that the Baltic Sea Region has something in store for everybody
is thus qualified by excluding actors which take a ‘narrow’, that is erron-
eous, view of their interest.
A broad social and economic thrust sits well beside the North German
initiatives from Björn Engholm and associates. As early as 1988, they began
Iver B. Neumann 173

to advocate the forging of a new Hanse, an Ostseeraum and so on (Chancen,


1990). In doing so, they draw attention to the way in which climate, culture
and history have themselves forged a natural community:

The close ties between the peoples [of the Baltic Sea Region] are bound by
the social standards, temperaments and social characteristics which in
the last instance stem from the living conditions of the North: The land-
scape, the climate, the maritime environment and the settlement patterns.
We have a stable temperament, we are not gregarious, rather a bit inac-
cessible, yet reliable. Our sense of social justice is well advanced. The
common background of the Northern European countries covers a broad
spectrum and has deep roots. What we need, is a strategy for the future.
(Wind, 1992: 53)7

The ascription of nurture to nature, the stress on a common human Geist


and the forging of a ‘We’ (Self) as opposed to an Other more unstable, more
gregarious, more accessible, less reliable, less just, less advanced and less tol-
erant; Engholm is obviously well versed in the German romantic nationalist
literature.
As seen from the Russian shore, the Baltic Sea Region is an opportunity to
become a Northern European insider at last. At the Moscow end, the former
Russian Deputy Foreign Minister Andrey Fedorov put forward a suggestion
for regional cooperation within what he referred to as the Nordic-Baltic Belt
(severo-baltiyskiy poyas).8 The project would include the Nordic states, the
Baltic states and the four Russian political entities Murmansk, Leningrad
(now St. Petersburg), Karelia and Kaliningrad. Instructively, German Länder
and Poland would be excluded, leaving Russia as the only participant which
is not a small power.
The Russian Western provinces, on their part, have been actively pursuing
bilateral contacts with neighbouring non-Russian areas, among other things
in order to minimize economic control from ‘the centre’, that is, Moscow.
In St. Petersburg, for example, it is pointed out that the city is by far the
largest Baltic city. The mayor’s main advisor writes that St. Petersburg is a
bridge ‘between Russia, a number of the countries of the Community of
Independent States and the rest of Europe . . . Through St Petersburg, Europe
may as it were stretch its borders towards the Pacific’ (Yag’ya, 1992). A defin-
ition of the Baltic Sea Region along these lines would, of course, place
St. Petersburg close to its geographical core, and not on its Eastern periphery.
In this sense, this proposed definition of the Baltic Sea Region is a variant of
the ‘Eurasian’ idea of the 1920s, that held Russia as the natural bridge
between Europe and Asia.
In Poland, the urge to define oneself as the hub of regional cooperation
has surfaced in a similar way, but with a different twist. At one point during
the existence of the Polish–Lithuanian Commonwealth, Poles referred to
174 A Region-Building Approach

their country as the land between the seas; that is, between the Baltic and
the Black Seas.
For an actor to combine two regional projects in order to highlight his
own importance is interesting. Poland spent the interwar period vainly trying
to build a region between Russia and Germany. These failures are still seen
as a drawn-out preface to the national tragedy which took place in 1939.
Echoes of this can be heard in today’s political debate, and lend a particular
urgency to Polish region-building attempts in the Baltic Sea as well as in
Central Europe and vis-à-vis the EU.
Estonia and in a lesser degree Latvia share shades of Poland’s traumatic
memories of failed interwar attempts to forge a region which could somewhat
offset German and Soviet advances ( Järve, 1991). Like Poland, Estonia, Latvia
and Lithuania refuse to put all their region-building eggs in one basket. Although
these three states set up a Baltic Council in the 1930s, their efforts to build
an image of a three-state Baltic region only date back to the second half of
the 1980s. As recently as in 1987, an exile Estonian in a conference on
‘Regional Identity under Soviet Rule: The Case of the Baltic States’ remarked that:

The pioneering cooperation of young exile Latvians, Lithuanians, and


Estonians, which led to the Copenhagen Tribunal, to the ‘Cruise’, and to
a Baltic Futures Seminar in Summer 1985, must be commended. Hardly
ever did such inter-Baltic enthusiasm exist earlier, either in the Baltic or
in exile. (Rebas, 1988: 101, 113; cf. Bungs, 1988)

The Estonian, Latvian and Lithuanian attempt at projecting an image of a ‘Bal-


tic region’ onto ‘the West’ in the last few years of the Cold War was, however,
instantly effective, and makes for a nice illustration of the potential rewards
of even the most superficial exercises in region-building. Equally instructively,
region-building between the three has come to a standstill after the resuscita-
tion of statehood. Estonian, Latvian and Lithuanian have aspired to join the
Nordic Council, but they have had to vie with other conceptualizations for the
institutional definition of the Northern European region. The Nordic Council
itself, for example, at an early stage leant towards a structure whereby Nordic
and Baltic Councils would together form a Council for the Baltic Sea Region.
For example, it put its money behind a report where one can read that:

The project The Nordic Region in Europe has established a reference


group of researchers from the Baltic Academies of Sciences. They will follow
the negotiations to establish a Baltic Council with the aim of influencing
the process. They see it as an important goal to forge an organisation
which is compatible with Nordic Cooperation. (Norden, 1991: 204, n. 6)

It is even less surprising that the Nordic Council and this ‘reference group of
researchers’ have joined forces with the activists behind the region-building
Iver B. Neumann 175

project for a Baltic Sea Region mentioned at the beginning of this section,
and with region-builders in the North German Länder. The upshot was that
the Nordic Council arranged a series of parliamentarian conferences on
cooperation in the Baltic Sea area, and in March 1992 the foreign ministers
from all the states involved established a maximalist Baltic Council (that is,
with participation of all riparian states as well as Norway), which after five
years had already taken on a certain hue of naturalness.
Finland has been among the driving forces behind the parliamentarian
conferences, and has generally maintained a high region-building profile.
Finland has aimed to add Baltic and Russian areas to the Nordic region, and
in this way forge a Baltic region where Finland would be centrally placed
geographically.
In Sweden, too, region-building activity has centred on Sweden as a ‘natural’
core, with the Nordic region as an inner circle, and a wider Baltic cooper-
ation as an outer circle. In this way, Sweden has found a formula for trans-
forming the strategy for regional domination discussed above, to fit the new
circumstances of the post-Cold War era. Only in Iceland and Norway has
there been little region-building activity along these lines. This is hardly sur-
prising, considering that the two states are not situated at the shores of the
Baltic Sea. In Norway, the preoccupations were for the first period with pre-
serving the Nordic region, and with the widening gap between the decreasing
level of tension in the Baltic Sea on the one hand, and the sustained presence
of naval vessels in the High North on the other.
In September 1991, however, Foreign Minister Thorvald Stoltenberg
owned up to the new developments and admitted that ‘[w]e just have
to come to terms with the fact that the Nordic region (Norden) is not what it
used to be’ (quoted in Dagens Næringsliv, Oslo, 21 September 1991). Norway
then tried to go on the offensive with a two-pronged region-building attack.
First, Foreign Ministry sources started to float informal suggestions for
a ‘Northern region’, stretching from the Kola peninsula to the southern
shore of the Baltic Sea. The Kola peninsula, which is bordering Norway to
the west, harbours the world’s largest naval base, and by tying this area into
a regional constellation, Norway hopes to avoid being left alone with Russia
in the North. This region-building project was subsequently refined, in a
manner which brings to mind the Polish attempts to highlight itself as
the link between the Northern European and a Central European regions.
The ‘Northern region’ was depicted as a conglomerate of an Arctic, a Baltic
and a North Sea region. Incidentally, the ‘Northern region’ thus defined
would have Norway as its pivotal axis (Jervell, 1991).
Norway’s second line of attack was to try and get a grip, however tenuous,
on the Baltic coastline. Since, as the foreign minister remarked in a speech
at the time, ‘one can hardly call Oslo a typical Baltic city’, one had to find
some other way of staking one’s claim to Baltic status.9 This was done by
introducing something which the foreign minister, in the same speech,
176 A Region-Building Approach

declared to be ‘something entirely new in Norwegian foreign policy’. The


Norwegian delegation to the meeting of foreign ministers in March 1992,
where the establishment of a Baltic Council was declared, included a repre-
sentative of the Southeasternmost Norwegian county of Østfold. The reason
for the innovation surfaced during the meeting, when it was attempted to
shore up Norway’s claim to Baltic status by maintaining that Østfold was
situated ‘at the mouth of the Baltic Sea’ (Brundtland, 1992).

Conclusion

This examination of post-Cold War discourse on Northern Europe does


indeed illustrate that the region-building approach is vindicated in holding
that multiple alien interpretations of the region struggle, clash, deconstruct,
and displace one another (cf. Jessop, Chapter 10; Bøås, Marchand and Shaw,
Chapter 11). Whereas a number of statements made by representatives of
the ‘Nordic’ states continue to acknowledge the existence of a ‘Nordic’
region, nearly all are quick to stress that the continued existence of such
a region is not contradictory to the forging of a new Baltic Sea Region. The
Nordic region does, in other words, seem to undergo a sea change.
Of course, inside-out and outside-in approaches to regions offer a number
of insights into the character of this transformation. The region-building
approach would not maintain, for example, that inside-out explanations in
terms of cultural affinity are necessarily incorrect renditions of history.
Indeed cultural ties between the Nordic region and the Baltic at large
already existed in the Middle Ages.
The region-building approach would not necessarily take issue with any
claims of continuity as such. It would, however, insist that these facts, or
even cultural similarities as such, are not in and of themselves politically
relevant. It has already been noted how the high level of cultural similarity
between Scandinavian elites, and for that matter between their citizenries,
did not in and of itself spawn a Scandinavian state. For the sake of contrast,
witness the cultural similarities between the Northern and Southern shores
of the Mediterranean, which were activated as part of a French region-building
and indeed state-building project at one point, only to be deactivated later
to the extent that it now seems preposterous – and certainly politically
irrelevant – to mention them. Cultural differences are made relevant by
political actors, to serve some political cause, and their activation is there-
fore itself a political act.
That poses one vital question: is it possible to construct a region, as it
were, ex nihilo? A region-building approach would suggest that the answer
to this question is a principled yes. It is always possible to find some link,
some pre-history, which can be used to justify the inclusion of a certain
actor in a certain region and so on. Based on this assumption, the region-
building approach would insist on going to the root of things and ask where
Iver B. Neumann 177

the criteria for what is ‘natural’ come from, who formulated them, who
chose to apply them and thereby made them relevant, and who stand to
gain from them.
Proponents of an outside-in analysis may perhaps go along with such a
sentiment, but then go on to criticize the region-building approach for
pouring old wine into new bottles. The case of Northern Europe does indeed
show that it was only as the need to react to the upheaval on the inter-
national and European levels hit the local actors, that the new bout of
region-building really took off. This is indeed so, and since external factors
were thus able thoroughly to impact a region that has often served as a
showcase for inside-out approaches, it is a powerful argument in favour of
outside-in approaches.
Yet the analytical divide between an ‘outside’ that is making the running
and an ‘inside’ that is trying to avoid being run down, should in and of
itself raise suspicions about whose interest such an analysis may serve. The
region-building approach would not necessarily have any principal objec-
tions to the foregrounding of great powers; after all, it is a theory based on
the nexus between power and knowledge. Objections would, rather, be
raised against tendencies to exclude other state and societal actors, and
against the reification of the ‘national interest’ (cf. Bøås, Marchand and
Shaw, Chapter 11).
This critique reveals the normative core of a region-building approach.
Instead of adopting the accepting attitude inherent in many outside-in
approaches, it insists on an unaccepting, irreverent and therefore invari-
ance-breaking attitude.

Notes
1. Buzan (1991: 190). Buzan again follows Cantori and Spiegel (1970) by characteriz-
ing ‘the Nordic area’ as a ‘distinct sub-region’ (Buzan, 1991: 200), and Deutsch
et al. (1957) in labelling it a security community (cf. Buzan, 1991: 218).
2. One notable exception concerns economic theories of regions, where outside
pressures of capital accumulation and innovation are often held to be met not
only or perhaps not even primarily by states, but also by firms. In the literature on
the Nordic region, however, a focus on the size of the home market and the sub-
sequent enhanced ability to compete, so familiar for example in the literature on
the European region, has largely been absent. This fact, as well as the failure of the
Nordic countries to forge a customs union during the Cold War period, may be
taken to support the view that Northern Europe is a sub-region of Europe, as this
very way of denoting it indeed suggests.
3. I thank Mats Berdal for directing me to this source.
4. This critique is a reading of Buzan’s People, States and Fear (2nd edn, 1991: 186–229),
which declares itself the most authoritative statement of the theory; cf. Buzan,
1991: 228, note 9. It also takes into consideration subsequent developments,
especially Buzan, Wæver and de Wilde (1998) and Buzan (Chapter 10).
178 A Region-Building Approach

5. ‘I am convinced’, Swedish Prime Minister Carl Bildt exclaimed to the National


Press Club in Washington in February 1992, ‘that one of the most prominent
features of the European decade that the 1990s will be a revival of the importance
of the Northern European region. And in this revival Sweden, as the largest and
most centrally located of the Nordic countries, will play a pivotal role.’
6. In his Murmansk speech of 1987, Gorbachev also came close to availing himself
of this move.
7. The circumstances which allow Engholm’s use of the pronoun ‘we’ are, first, that
the quote is from a Danish article and, second, that Engholm is an easily recognizable
Danish name.
8. Conversation with Andrey Fedorov, Moscow, 15 June 1991. Excerpts printed in
Ny Tid (Helsinki), 7 November 1991.
9. Speech to a seminar organized by the Storting’s Nordic secretariat and the Nordic
Association, Oslo, 4 April 1992.
10
The Political Economy of Scale and
the Construction of Cross-Border
Micro-Regions*
Bob Jessop

The construction of cross-border regions (CBRs) as an example of micro-


regionalism is best related to the more general rescaling of economic, political,
and social processes. For CBRs both respond and contribute to the ‘relativiza-
tion of scale’ associated since the early 1980s with the decline in the relative
structured coherence among national economy, national state, and national
society that had characterized the heyday of the post-war boom. The crisis of
the post-war mode of economic growth in the advanced capitalist economies,
the end of the ‘Second Cold War’, the rise of global neoliberalism, the
breakup of the Soviet Bloc, China’s ‘opening’ to foreign capital, and the grow-
ing number of so-called failed states have all contributed to this relativization
of scale. This is reflected in a proliferation of scales on which attempts occur
to restructure economic, political, and social relations – ranging from
policies to promote economic globalization, global governance, and global
culture through various forms of mega-, macro-, and meso-regionalism to
concerns with micro-regional economies, local community empowerment,
and ‘tribal’ identities. This chapter explores some of the processes and strat-
egies linked to the emergence and consolidation of CBRs and comments on
their significance for economic and political restructuring.

The primacy of the national scale in post-war capitalism

In the ‘thirty glorious years’ of post-war economic expansion, it was the


national scale of economic organization that dominated. Thus the complex
field of economic relations was handled as if it were divided into a series of

* This chapter is a revised version of Jessop (2002). It has benefited from comments
provided by Neil Brenner, Martin Jones, Markus Perkmann, Ngai-Ling Sum, and
Fredrik Söderbaum.

179
180 The Political Economy of Scale

relatively closed national economies. The primacy of the national economy


and national state was linked within Atlantic Fordism to the relative closure
of post-war economies undergoing more or less significant reconstruction
on the basis of mass production and mass consumption. While international
institutions and regimes were organized to rescue European nation-states
and ensure national economic growth, their sub-national (regional or local)
states acted primarily as the relays of national policy. In several East Asian
mercantilist regimes or ‘trading nations’, the same sort of ‘naturalization’
occurred through the prominence of ‘national security’ discourses that tied
internal and/or external security to close control over the domestic economy.
Import-substitution industrialization had similar effects in many Latin
American economies. The continuing economic internationalization of these
different types of economy and the emerging crises of their respective models
of growth served to undermine the taken-for-grantedness of the national
economy as an object of economic management.
Regional and local economies were also increasingly seen to have their
own specific problems that could be resolved neither through national
macro-economic policies nor uniformly imposed meso- or micro-economic
policies top-down by national states. Replacing the national economy as the
primary object (and objective) of economic governance for most OECD mem-
ber states is the knowledge-based economy (KBE) in an era of globalization.
The KBE is heralded as the latest stage of capitalism and its expansion is
being promoted to overcome the economic crises of the 1980s and 1990s. It
is closely linked with narratives of international competitiveness, flexibility,
entrepreneurialism, social capital, learning, trust, reflexiveness, and decen-
tralized governance as well as with the growing role of new information and
communication technologies, ‘smart products’, and expert services. The
promotion of the KBE is also linked with new forms of supranational eco-
nomic coordination and/or regulation as well as with calls for greater regional
or local autonomy to pursue appropriate supply-side strategies at their point
of application. These strategic reorientations intensify uneven development,
however, provoking attempts to counteract their effects in more marginal-
ized, peripheral, or uncompetitive regions. Variations in these strategies and
counterstrategies are reflected in the changing economic strategies pursued
in different CBRs.
The scope for regionalism on different scales also expanded with the end
of the Second Cold War. Alongside new types of meso- and macro-regional
linkage associated with new forms of rivalry in Europe and the wider world,
especially for influence in the post-socialist economies, there are many new
opportunities to link previously peripheral border-regions. This applies not
only to the new national states in the former Soviet bloc but also to other
post-socialist or transforming socialist societies. The growth of CBRs on the
borders of post-socialist economies and/or between post-socialist economies
and their capitalist neighbours are two important expressions of this
Bob Jessop 181

phenomenon. The end of the bipolar world system has transformed rather
than ended security questions and they still shape the prospects for regional
cooperation in Europe. Similar problems can be found in Cross-Straits eco-
nomic development between Taiwan and the People’s Republic of China
(PRC); the Tumen River Area Development, which involves parts of Russia,
China Mongolia, Japan, North Korea, and South Korea (Jordan and Khanna,
1995); the Greater Mekong Sub-region; and areas of civil war or interna-
tional conflict in the Horn of Africa and Sub-Saharan Africa or the Balkans.
Security and immigration issues are also sources of friction in the development
of cross-border cooperation on the United States–Mexican border (Scott,
2002).

The relativization of scale

Although these processes have demoted the national scale as constituted in


the post-war period as the basis for organizing economic, political, and social
relations, no other scale of economic and political organization (whether
the ‘local’ or the ‘global’, the ‘urban’ or the ‘triadic’, the ‘regional’ or the
‘supra-regional’) has yet won a similar primacy. Collinge (1996) refers to this
phenomenon as the relativization of scale. Indeed different economic and
political spaces are competing to become the new anchorpoint around
which other scales (however many, however identified) can be organized to
produce a suitable degree of structured coherence. This involves economic
and political projects oriented to different scales and has not yet produced
consensus on how these are to be reconciled – reflected in continuing
debates and active contestation over the relative importance of global, national,
and various regional sites and spaces of economic action (cf. Hettne, Chapter 2;
Hveem, Chapter 5; Tussie, Chapter 6; Mistry, Chapter 7; Bøås, Marchand
and Shaw, Chapter 11). In this context it is important to note that there is
no pre-given set of places, spaces, or scales that are simply being reordered.
For places, spaces, and scales are not pre-given but subject to discursive
struggles over mapping and naming (Neumann, Chapter 9; Jenson, 1995;
Paasi, 2001) and more substantive struggles over their social, material, and
spatio-temporal institutionalization. Thus we find that new places are
emerging, new spaces are being created, new scales of organization are being
developed, and new horizons of action are being imagined. In particular,
the global is only one of many scales on which attempts to restabilize cap-
italism are being imagined and pursued. Indeed, globalization is often linked
closely and in complex ways to processes on other spatial scales (cf. Bøås,
Marchand and Shaw, Chapter 11). It is best seen as part of a proliferation of
scales and temporalities as narrated, institutionalized objects of action,
regularization, and governance.
Thus, whilst there has been growing emphasis on how best to organize
the global scale in line with a wide range of often conflicting criteria,
182 The Political Economy of Scale

smaller scales (notably the urban, regional, and national) are still significant
(if often in new ways) as substantive sites of real economic activities. Many
strategies are also being developed to link these and other scales to the
global – including internationalization, triadization, regional bloc formation,
global city network-building, cross-border region formation, international
localization, glocalization, glurbanization, and transnationalization.1 The
emergence of cyberspace as a virtual arena of action that appears to be every-
where and nowhere has further complicated these problems.2 Moreover,
as new scales emerge and/or existing scales gain in institutional thickness,
social forces also attempt to develop new mechanisms to link or coordinate
them. This adds further layers of complexity and can trigger new bouts of
reaction and counterreaction as events or processes occurring on one scale
are used to justify action on other scales. For example, internationalization
often provokes regional responses (Perkmann, 2000); Europeanization
requires coordination of regional policies (Leresche and Saez, 2002); the
development of the North American Free Trade Agreement (NAFTA) has
prompted the formation of the Cascadia region, stretching from Alaska to
Oregon and North California (Blatter, 2001; Sparke, 2002). Thus the resur-
gence of provinces and regions within territorial states and the growth of
CBRs on their fringes are partly responses to political centralization. These
processes can also be linked to political ecological concerns, such as sustain-
ability, and in some cases to the decline of old security concerns and the rise
of new concerns in the 1990s.
This generates increasing complexity as different scales of action come to
be linked in various mixes of vertical, horizontal, diagonal, centripetal, cen-
trifugal and vortical ways. This complexity cannot be captured in terms of
simple contrasts, such as global–national or global–local, or catch-all hybrid
concepts such as ‘glocalization’ or the ‘tranversal’. Instead we now see a pro-
liferation of discursively constituted and institutionally materialized and
embedded spatial scales (whether terrestrial, territorial, or telematic) that are
related in increasingly complex tangled hierarchies rather than being
simply nested one within the other, with different temporalities as well as
spatialities (cf. Bøås, Marchand and Shaw, Chapter 11).
The proliferation of spatial and temporal horizons linked to the relativiza-
tion of scale involves very different opportunities and threats for economic,
political, and social forces from those that prevailed when the national scale
was deemed primary. It encourages actions to exploit new opportunities in
order to promote specific values, identities, and interests and/or defend
them against the frequently disruptive impact of rescaling (cf. Bøås, Marchand
and Shaw, Chapter 11). Many different actors and social forces are involved
in this exploitation–contestation, ranging from economic migrants through
legal and illegal enterprises to states and non-governmental movements.
Economic and political actors are often active in attempts to enhance place-
based competitiveness and/or to enhance competitiveness by promoting
Bob Jessop 183

mobility. There is no simple correspondence between strategies and actors:


some firms are territorially fixed, others move in a space of flows; states can
seek to embed economic activities in place or promote debordering on
behalf of mobile domestic firms. Overall such activities reorder – across
economic spaces on different spatial scales – place-based complementarities
and differences as the basis for dynamic competitive advantages. Nonetheless
the competitive game always produces comparative losers as well as winners.
Some commentators explain emerging regions or scales as based on ‘natural
economic territories’ (NETs) that have been allowed to re-emerge or develop
as the national state declines as an economic as well as political ‘power
container’. It is certainly interesting to reflect here on the resurgence of
older, cross-border trading blocs in the era of post-socialism and the end of
the Cold War. This can be seen in Eastern and Central Europe as well as in
‘Greater China’. But I believe that NETs are economic spaces that have been
discursively ‘naturalized’ as well as being economically and politically
constructed. Whether one sees any given ‘NET’ as natural or not, for example,
depends on one’s understanding of the dominant modes of competition and
the factors making for structural competitiveness. A Ricardian interpretation
(based on factor-driven growth) would lead one to identify different ‘NETs’
and economic strategies compared to those implied in a more Schumpeterian
interpretation (based on innovation-driven growth) (cf. Porter, 1990). Thus,
rather than seeking an elusive objective economic criterion for defining a
region, one should treat regions as emergent, socially constituted phenomena
(cf. Hettne, Chapter 2; Neumann, Chapter 9; Bøås, Marchand and Shaw,
Chapter 11).

The complexities of rescaling

We can distinguish four possible strategies (by no means mutually exclusive,


let alone exhaustive) that are linked to differences in the preferred form of
scalar articulation. The first is to widen or deepen the scalar division of labour
within an integrated, vertically nested set of scales. This strategy typically
involves promoting economic development (on whatever scale) by exploiting
growth dynamics at progressively ascending spatial scales from the local
through the regional and the national to the supranational or global. In this
context important aspects of the division of labour tend to be organized
across scales rather than within them. Such strategies may be promoted
from above and/or emerge from below. They are reflected in attempts ‘to
position places centrally on “stages” of various spatial scales: regional,
national, international, global’ (Hall and Hubbard, 1996: 163–4; Sum, 1999).
Such strategies also tend to respect national boundaries but they are by no
means inconsistent with CBRs that are nationally promoted and where the
local authorities either side of the border are oriented towards their respect-
ive national centres rather than interested in consolidating political and
184 The Political Economy of Scale

administrative units that strive for autonomy (cf. Nilson, 1997). This can be
contrasted with border-regions in which the border is a unifying rather than
a dividing feature, that is, where the border functions to integrate not divide
(Africa), and which are therefore planned as a whole, not as two separate
parts (Buchanan, 1995; Gooneratne and Mosselman, 1996).
The second option is to build horizontal linkages on the same scale within an
integrated, vertically nested set of scales. Such strategies range widely from the
local to the triadic scale. Many CBRs illustrate this strategy; so do translocal
alliances and virtual regions. The latter are developed to link non-contiguous
locales with shared or complementary interests – such as the cooperation
among the so-called European ‘Four Motors’ regions, comprising Baden-
Württemberg, Rhône-Alpes, Lombardy, Catalonia, each of which is a
dynamic city-region associated with a major non-capital city. In general this
strategy builds on common territorial interests and identities and seeks to
exploit joint or complementary resources and capacities. The aim is either
to develop a critical mass through simple agglomeration economies or to
develop a division of labour at the same scale rather than across scales. This
horizontal strategy could be autochthonous and/or be promoted by bodies
on lower and/or higher tiers or scales. Thus CBRs in Europe are promoted by
local communes as well as the EU.
The third option involves building ‘transversal’ linkages, which means
bypassing one or more immediately neighbouring scale(s) to seek closer
integration with processes on various other scales. This is especially signific-
ant where foreign direct investment and production for export are involved
so that links to an immediate hinterland or even the national economy may
prove far less important than the connection between local and supranational
scales. Growth triangles in Asia exemplify this strategy (Parsonage, 1992;
Smith, 1997). So do export processing zones (EPZs), free ports, and regional
gateways – although these tend to be located within one national territory
and to be oriented outwards (cf. Chen, 1995; Ohmae, 1995).
Finally, a fourth option is to seek an escape from scalar or place-bound con-
straints by locating one’s activities in a borderless space of flows or moving into
‘cyberspace’. But this does not obviate the need for some sort of spatial fix
(offshore islands, tax havens, etc.).
These options can be combined to produce more complex strategies. They
can be applied on a range of different scales and CBRs belong primarily to
the second and third strategies. More generally, such strategies can be
considered from two viewpoints: (i) their primary carriers: private economic
agents (firms, banks, chambers of commerce) or public bodies (different
tiers of government, local or regional associations, quangos); and (ii) the
nature of the inter-scalar articulation involved: vertical (up and/or down),
lateral (extraversion or introversion), transversal, etc. My starting point
below is the primacy of the national scale in the post-war period but this
should not lead us to conclude that the relativization of scale involves no
Bob Jessop 185

more than ‘internationalization’ based on flows in and out of national eco-


nomic spaces. For such penetration and extraversion is typically selective,
uneven, and partial and by no means directly connects whole national
economies.
Accordingly we should examine the many different forms of rescaling
that are currently occurring and their interrelations. The following list is not
intended to be exhaustive but serves to illustrate the range of possibilities
that involve firms and states. They are presented in ascending order from the
micro-regional through sub-national transversal linkages to the supranational.

• Relocalization and re-regionalization: the re-emergence and revalorization


of local and regional economies in national economies (such as new
industrial districts, innovation milieux, learning regions, gateway cities,
Mediterranean islands as bridges between Europe and Africa) or, in some
cases, the decomposition of the national economy due to economic
crisis, civil war, state failure, or some other disruptive mechanism.
Re-regionalization may also involve an increase in the scale of regions
(Smith, 1988).
• Multicentric or polynucleated metropolitanization: a vast expansion of the
size and scale of leading cities within urban hierarchies so that they
become larger metropolitan or mega-urban regions with several centres.
• Inter-localization or inter-regionalization: the development of horizontal
linkages between contiguous localities or regions on the same scale but
in different national states (for instance, cross-border regions, translocal
alliances, sub-federal states) that have shared or complementary eco-
nomic and/or political interests (Hocking, 1999); and linkages that often
bypass the national level but may sometimes be sponsored by one or
more national states as well as by local, urban, and regional authorities
and which may be reflected in the development of binational production
zones, international border- or transfrontier metropoles (Albert and Brock,
1996: 10, 20–1) and in the emergence of international development
corridors along major transport arteries (riparian, coastal, built transport
hubs and networks, etc.). Such places are sometimes regarded as ‘glocal’,
i.e. globalized locations. At the extreme these may become extraterritorial
spaces (such as offshore financial centres, tax-havens, etc.).
• Translocalization or trans-regionalization: the development of horizontal
linkages between non-contiguous localities or regions on the same scale,
either within or across national states. Boisier (1994) labels such relations
‘virtual regions’ when they result from the deliberate construction of
inter-local strategic alliances.
• Global city networks: the formation of global cities that have a strong
outward orientation towards other global cities as opposed to national
hinterlands. This could be seen as a special case of trans-regionalization
as global cities have extensive regions and because the global city hierarchy
186 The Political Economy of Scale

has lower tiers and specialist niches which also form transnational link-
ages. Where the promotion of such linkages results in the extraversion of
urban development strategies intended to promote a city’s competitive-
ness in the global economy, we can refer to ‘glurbanization’ ( Jessop and
Sum, 2000).
• Meso-regional integration: the formation of sub-triad but supranational
blocs, such as ASEAN, Mercosur, CARICOM, which can either form
building-blocks for the next level of integration or else provide resistance
to it (cf. Hettne, Chapter 2; Tussie, Chapter 6; Mistry, Chapter 7).
• Macro-regional integration: notably triadization; the formation of state-
sponsored multilateral regional economic blocs embracing several
national economies formally in North America, Europe, and North East
Asia (cf. Gamble and Payne, Chapter 3; Tussie, Chapter 6).
• Inter-triadization: the growing interpenetration of the triad blocs as multi-
nationals headquartered in each form strategic alliances with partners
from others and the interiorization of interests of such multinational cor-
porations (MNCs) within triadic and national states (cf. Poulantzas,
1975).
• Trans-triadization: the development of bilateral fora and summits involving
different pairs of triads as they seek to develop and to deepen specific
complementarities, notably through the Asia-Pacific Economic Cooper-
ation (APEC) forum, the New Transatlantic Agenda, and the Asia-Europe
Meetings (ASEM) (this has also been discussed under the rubric of mega-
regionalization, see Hatsuse, 1999; or trans-regionalism, see Hettne,
Chapter 2; cf. Hveem, Chapter 5).
• Globalization proper: the introduction and acceptance of global norms
and standards, the development of globally integrated markets together
with globally oriented strategies, ‘deracinated’ firms with no evident
national operational base, and ‘ubiquities’ (uniformly available locational
facilities).

These different scalar processes and strategies often combine to form


more complex networks or strategies as well as tangled hierarchies of
regions in geo-economic and geopolitical terms. The famous ‘Blue Banana’3
as a giant transnational macro-region provides one example. Moreover, as
new scales and tangled hierarchies emerge, there are also efforts to coordin-
ate them. Thus, as the triad regions begin to acquire institutional form and
identity, new forums develop to coordinate their bilateral relations. Like-
wise, as regionalism develops in the EU, we find not only an EU-wide Com-
mittee of the Regions but also a proliferation of other peak associations and
multilateral linkages among regions. This is reflected in the Europeanization
of regional policy and in the regionalization of European politics (Balme,
1996). Even further down the scale, local authorities develop associations to
promote their interests at national, regional, international, and global
Bob Jessop 187

levels. All of this produces increasing scalar complexity, increasing scope for
deliberate inter-scalar articulation, and increasing problems in making such
inter-scalar articulation work. Similar issues affect time and its governance,
as seen in the emergence of nano-temporalities at the micro-level and long-
term action to ensure environmental sustainability at the macro-level. This
leads in turn to growing problems of inter-temporal governance.
In both geo-economic and geopolitical terms, the various types of region
are marked by different and changing degrees of hegemony and hierarchy,
overlapping spheres of influence, national components and transnational
influences, interdependencies and pockets of self-containment, embryonic
and dying regions, marginal spheres and areas of confrontation. These com-
plexities provide more opportunities for rescaling, jumping scales, and so
on; they also re-order spatial and scalar hierarchies, producing new forms of
uneven development. This is reflected not only in shifts among ‘national
economies’ but also in the rise and fall of regions, new forms of ‘North–South’
divide, and so on.
This points to potential for alliance strategies among states on similar or
different regional scales (such as the EU, whether as an intergovernmental
organization of nation-states or a ‘Europe of the regions’) to secure the basis
for economic and political survival in response to the imperatives of struc-
tural competitiveness on a global scale. These alliances will vary with the
position of the economies concerned in the global hierarchy. Thus, whilst a
small open economy (whether capitalist, post-socialist, or socialist) might
seek closer integration with the dominant economic power in its immediate
triadic growth pole, the dominant power might seek not only selectively to
bind neighbouring economies into its strategic economic orbit but also to
enter alliances with other dominant triad powers. An alternative strategy for
a small open economy is to seek niche markets in the global economy
(perhaps through encouraging strategic alliances with key firms in each triad
region) or to form regional alliances with other small economies (whether
they share borders or not) as a basis of increasing their economic capacities
and leverage. Moreover, since the national economy is no longer so taken-for-
granted, we also find sub-national regions, cities, and local economic spaces
pursuing strategies oriented to the changing forms of globalization and
international competitiveness.

Cross-border regions

Cross-border transactions based on geographical proximities and comple-


mentarity have always existed at the regional and sub-regional levels unless
prohibited by the states concerned for political, security, or economic reasons
(Thant, 1997: 43; on the European case, see Gasparini, 1999–2000b; Zago,
1999–2000). But CBRs have proliferated following the relative decline in
protectionism, the rise of neoliberalism, the end of the Second Cold War,
188 The Political Economy of Scale

and political commitments to regional integration. CBRs have become


specific objects of policy and not just spontaneous, natural economic terri-
tories. In this sense, they represent specific forms of innovation in relation
to space, place, and scale. They involve the production of new types of place
or space for producing, servicing, working, and consuming. They are linked
with new methods of place or space production to create location-specific
advantages for producing goods and services and offer new regulatory struc-
tures, infrastructures, scale economies, new labour markets, etc. They may
involve creating competitive advantage by exploiting complementarities
among sources of supply (such as the Indonesia–Malaysia–Singapore
Growth Triangle, formerly known as the Singapore–Johor–Riau [SIJORI]
Growth Triangle; or the links between EU member states and post-socialist
economies). And they refigure the scalar hierarchy and modify the position
of specific places within this hierarchy.
There are at least nine ways in which CBRs have emerged. These do not
have equal weight either historically or currently, let alone for any given
case; and they are typically linked with quite different forms of cross-border
or inter-regional cooperation. These alternative trajectories are best analyzed
together with the inter-scalar articulation strategies noted above (vertical,
horizontal, transversal, and virtual). It should also be emphasized that these
different patterns are not mutually exclusive. Most cases of CBR involve
hybrid patterns, whether through sequencing or a simultaneous combin-
ation of factors (for such patterns in the Nordic case, see Baldersheim and
Ståhlberg, 1999: cf. Neumann, Chapter 9). All that I am trying to achieve
here is to identify analytically distinct trajectories in the initial development
and, perhaps, subsequent consolidation of cross-border regions.
First, they may result from the recent selective reinforcement of obscure
and liminal forms of economic and political organization that have long
existed on the borders of states, even if disapproved by their respective
national states. These include ‘grey’ or ‘black’ economic activities, the
exchange of ‘bads’ as well as ‘goods’, for instance drugs, slaves, gun-running,
smuggling to avoid customs and excise duties, movement of illegal migrants
(cf. Bøås, Marchand and Shaw, Chapter 11). An interesting example is the
development of grey markets (such as the bazaar markets) at the borders of
the EU with Eastern and Central Europe and/or close thereto. Such activities
may reflect the shared peripheral status of the border regions, distant from
centres. They may become objects of government or governance to elimin-
ate them or else to transform and integrate them into broader economic
strategies.
Second, they may involve a resurgence of suppressed (but potentially still
viable) historical economic spaces following the end of the Second Cold War,
the collapse of the Iron Curtain, and the ‘opening’ of China. Such regions
were sometimes pioneered bilaterally during the Cold War, for instance,
Finland–Estonia, Austria–Hungary, Greece–Bulgaria (Hettne, 1997b: 25).
Bob Jessop 189

They are often linked to shared resources on borders (rivers, lakes, coasts,
forests); the survival or resurgence of old trade routes and/or connections
inherited from precolonial empires; and the existence of a common
language or ethnicity. Examples include the partial re-emergence of the
Austro-Hungarian empire, the Swedish Baltic Empire, the relinking of Balkan
countries once in the Ottoman Empire, the relinking of the Central Asian
states that were once integrated into larger Turko-Islamic and Iranian for-
mations, the development of Northeast Asia (China–Russia–Japan), the rise
of ‘Greater China’, the Greater Mekong Sub-region, and the SIJORI Growth
Triangle (Johor–Riau Empire). More generally, ‘the relaxation of political
tensions has motivated many countries to open up their “shadow belts”,
sub-regions that are distant from the national trade and commercial centers,
that developed during the Cold War, sub-regions that can now be more nat-
urally linked with world markets and emerging regional ones. This is the case
with Northeast China, the west coast of Japan, the west coast of Korea, the
Russian Far East and Mongolia’ (Jordan and Khanna, 1995: 445; cf. Labrianidis,
2001). An important factor here is that some border regions, which served
as defensive buffer zones during the Cold War and were regarded as unsafe
for investment, are now seen as ‘bridges’ linking potential economic partners
(Gooneratne and Mosselman, 1996: 138). This is reinforced where borders
imposed from above had divided erstwhile ‘historic’ regions with their own
identities and, in some cases, distinctive ethnonational groupings.
Third, cross-border regions may emerge from (or be reinforced by) the
spill-over of metropolitan hinterlands and/or the growth of complementary
towns either side of shared borders. Twin cities along the Canada–United
States and United States–Mexico borderlands provide many examples
(Hansen, 1986; Herzog, 1991; Scott, 2002). This is also reflected in increas-
ing north–south linkages between Canadian and US–American regions,
although there is still more trade between any two Canadian provinces than
between any one Canadian province and an American state. There are also
many closely connected border towns in Europe (Gasparini, 1999–2000a, b).
A well-known European example is the Regio Basiliensis, which has Basel/
Basle as its metropolitan centre. This dynamic could also be a contributory
factor to the growth of other CBRs, such as the SIJORI triangle as the product
of spill-over from Singapore as an expanding city-state, or the economic
growth of the Pearl River Delta on the basis of Hong Kong’s expansion after
the opening of mainland China.
Fourth, cross-border regions may come from the creation of new functional
economic and/or ecological spaces where there are complementary resources,
common problems, or a shared peripheral status prompting a need for cooper-
ation on issues such as the environment or transport infrastructure. Such
cross-border regions are often linked with the discursive constitution of new
types of economic territory or economic space, for instance, growth triangles,
EPZs, innovation milieux, gateway cities, learning regions, bio- or eco-regions.4
190 The Political Economy of Scale

Such strategies may spread through simple imitation, international proselyt-


ization, or explicit sponsorship and funding from supranational bodies. The
border may have an important function in such spaces rather than being
seen as a barrier to cooperation. For example, Kearney shows the usefulness
of borders in managing transnational labour markets because they may
serve to maintain the spatial separation of the site of the purchase and
expenditure of labour from the sites of its reproduction insofar as the respective
loci of production and reproduction lie in two different national spaces
(Kearney, 1991: 58–9; cf. Wolpe, 1988). In this sense, the success of such
strategies depends on building new governance mechanisms for cross-border
cooperation without, however, eliminating the territorial differentials
associated with the border (Perkmann, 2000).
Fifth, CBRs may be promoted by national states in the hope of restabilizing
the national scale and enabling national economies to compete more effect-
ively. This would involve the top-down construction of new territorial
paradigms and the sponsorship of new territorial scales of action, thereby
involving rebordering as much as debordering. Here CBRs would act as
relays or bridges to other national economies and/or as means of integrating
national economic space into broader regional blocs and strategic alliances.
An early example of this in a European context was the work of the
(inter)governmental commissions in Europe. They were created in the 1960s/
1970s at a central state level to promote development in border regions,
especially in the field of spatial planning and transport, for the good of the
wider national economies. Interest in this form of regional economic cooper-
ation expanded in the late 1980s and 1990s. This is probably closely related
to the multiscalar, multicentric, multiform nature of globalization –
prompting states to adapt by increasing the competitiveness of local and
regional sites for production, innovation, and allocation of capital.
Sixth, and conversely, supranational bodies may promote CBRs to under-
mine the national scale through a pincer movement from above and below.
This can be illustrated by the strategy of the Europe of the Regions. As the
President of the Euroregion noted: ‘the European Union expects the regions
to form networks, across frontiers, to enable them to counterbalance the
power of member states’ (J. Chabert cited in Taylor, 1995: 77). This strategy
involves inventing new, indirect modes and means of steering lower-level
tiers and non-state actors so that they become strategic allies of the
European Commission (Tömmel, 1998: 54–5).
Seventh, CBRs may be a reaction to uneven development linked with other
sub-, supra-, or transnational region-building processes. The city-states of
Hamburg and Bremen have been promoting a new Hanseatic League to
counteract the dynamism of the southern growth pole around Munich, with
its own transnational growth region formed by the Barcelona–Munich–Milan
triangle (Hettne, 1997b: 25). Likewise, the growth of the Blue Banana triggered
the Atlantic Arc project to promote peripheral EU regions facing the Atlantic;
Bob Jessop 191

foreign direct investment has reinforced the primacy of cities and core growth
regions in ASEAN and prompted a concern to promote growth triangles and
cross-border regions in more peripheral areas (Wong, 1994: 12–14); Tokyo’s
inability to meet the development demands of localities in the Japan Sea
prefectures has helped to trigger Japan Sea cross-border cooperation; and the
EU has promoted cross-border cooperation for less favoured regions during
the period of single market construction. Uneven development may also
produce a converse reaction on the part of stronger regions. Thus Murphy
(1993: 112–13) suggests that one reason for the formation of the Four Motors
region was worries about being dragged down by poorer neighbouring
regions.
Eighth, cross-border regions may emerge as part of nation-building projects
in multinational territorial states. This may reflect the desire to enhance
national autonomy within a federal system. Quebec provides a good
example of this, since it engages in cross-border cooperation as part of a
nation-building project with a long tradition in foreign relations, concluded
many inter-regional agreements in the past and pursues lobbying activities
in the United States (Keating, 1996). Alternatively the relevant nation may
straddle territorial frontiers. The development of trans-Pyrrhenean cooper-
ation between Catalan peoples in Spain and France and the resurgence of his-
torical economic territories in post-socialism may well illustrate this situation.
More problematic cases, where the right to development of cross-border
populations exists, may also eventually lead to cross-border cooperation (for
instance, Kurds).
Ninth, CBRs may emerge from career- and institution-building initiatives as
political entrepreneurs exploit opportunities created by the crisis of the
national scale, the thawing of the Cold War, the availability of EU policies
and grants, the initiatives of international organizations such as the Asian
Development Bank or the United Nations Development Programme
(UNDP), supranational deregulation allowing regional re-regulation, the
development of new infrastructures and logistics (Perkmann, 2000). Such
cases of simple economic calculation may be reflected in ‘grant coalitions’
(rather than growth coalitions) and simple responses to windows of political
opportunity in political entrepreneurialism.
Despite their new economic importance, CBRs lack both the solid bound-
aries demarcated by national frontiers and many of the macro-economic
institutional conditions often held to be essential for stable economic growth.
It is in this context that interpersonal networking and inter-organizational
negotiation become crucial in bridging the public–private divide across
frontiers and in securing the cooperation of so-called ‘key players’ drawn
from different functional systems. Moreover, the absence of a single state
with sovereignty over a CBR may not be the handicap that national state
managers may sometimes believe. For, if neither pure market forces nor top-
down command from a single political centre can guarantee the structural
192 The Political Economy of Scale

or systemic competitiveness of an economic space, there may be space for a


more cooperative search to provide a stable framework of economic action
through other, more heterarchic, more flexible means.
One way to develop this further is through Messner’s (1998) schema of
different levels of organization relevant to pursuit of systemic competitiveness.
He distinguishes four aspects or levels of competitiveness: micro-, meso-,
macro-, and meta-competitiveness. In an era of globalization, competitiveness
still depends on place-specific as well as generic advantages and this will be
particularly true of its meta- and micro-level sources. Thus we might suggest
that, in the case of cross-border regions, the micro- and meta-levels will be
more significant than the macro-level and that the meso-level will be
important but modified in the light of the cross-border nature of the eco-
nomy. In turn these are particularly appropriate areas of intervention for
governance mechanisms that rely neither on anarchic market forces nor on
top-down planning but on various forms of networking, public–private
partnership, stakeholding arrangements and so forth (Jessop, 1998). There is
considerable scope here for meta-governance (for instance, the Council of
Europe provides model organizational rules for CBR agreements under its
Convention on Transfrontier Cooperation).

Cross-border regions and state restructuring

These complex forms of rescaling, ranging, as suggested, from relocalization


to globalization, are typically associated with three major trends in the state
and politics. These comprise: (i) the denationalization of the territorial state;
(ii) the shift from government to governance; and (iii) the internationaliza-
tion of policy regimes. Each of these trends is discernible in the development
of CBRs. For they illustrate denationalization but are still territorial, they are
typically based on multilevel governance, and they reflect international policy
preferences. Conversely, the development of CBRs tends both to reinforce
these trends and to provoke countertrends at the national level.
The first trend is the denationalization of statehood. This is reflected empiric-
ally in the ‘hollowing out’ of the national state apparatus, with old and new
state capacities being reorganized territorially and functionally on sub-national,
national, supranational, and translocal levels. One aspect is the partial loss
of de jure sovereignty by national states in certain respects as they transfer
policy-making powers upwards to supranational bodies or subscribe to more
or less asymmetrical treaty obligations. In both cases the new rules and deci-
sions become binding on national states. The former case is most evident in
the EU and the latter characterizes NAFTA and other intergovernmental
regional blocs as well as international bodies, such as the World Trade
Organization (WTO). Another aspect is the decentralization of authority to
subordinate levels of territorial organization and/or the development of
transnational but inter-local policy-making. CBRs are significant in this latter
Bob Jessop 193

respect both because of the enhanced role of regional or local states in eco-
nomic development and because of the development of transnational linkages
among regional or local authorities, involving what is sometimes called
‘paradiplomacy’ (Dommergues, 1992) or ‘intermestic’ politics (Duchacek,
1986). Thus the emergence of CBRs might seem to challenge the survival of
the national state – albeit otherwise than in supranational rescaling.
Nonetheless, countering this trend towards denationalization of the state,
is the continuing survival in many societies of the national state as the prin-
cipal factor of social cohesion. Elsewhere, of course, national states are in
crisis or have already decomposed. But, where the national state form does
survive institutionally, it also retains its crucial general political functions
even where more specific techno-economic, narrowly political, or ideo-
logical powers are transferred elsewhere. For supranational forms of political
organization are typically intergovernmental in character and the national
state is involved in transferring power upwards and legitimating this transfer.
As sovereign states they also retain the formal power to recentralize powers
delegated below and to regulate translocal contacts and agreements. Some
states are more powerful and effective in regard to inter-scalar articulation
than others, of course, with the imperial United States being the most
powerful state actor in this regard. Moreover, in many CBRs, the local or
regional administrative units involved on different sides of the border(s) act
as relays of national policy and are more oriented to their respective central
states than to forging political relations that undermine de jure national sover-
eignty. In this sense, national states act as ‘pivots between international
agencies and sub-national activities, because they provide legitimacy as the
exclusive voice of a territorially-bound population’ (Hirst, 1997: 21). Their
capacity to do so will continue to depend, however, on their ability to
secure social cohesion.
Second, there is a general trend towards the destatization of political
regimes. This is reflected empirically in a shift from government to govern-
ance on various territorial scales and across various functional domains
(cf. Hveem, Chapter 5). Governments have always relied on other agencies
to help them realize state objectives but there is now a major political
reordering of the relationship between government and governance. Although
this trend typically involves a loss of decisional and operational autonomy
by state apparatuses (at whatever level), it can also enhance their capacity to
project state power and achieve collective goals by mobilizing knowledge
and power resources from influential non-governmental partners or stake-
holders. This second trend occurs not only at the international and national
level but is also evident in the restructuring of regional, local, and cross-border
regional governance. Indeed CBRs are often characterized by complex multi-
level forms of governance involving a wide range of partners and stake-
holders recruited from different functional domains and scales of territorial
organization. It also means that states themselves are becoming partners,
194 The Political Economy of Scale

facilitators, and arbitrators in public–private consortia, growth coalitions,


etc., rather than the prime movers in many policy areas.
Countering this shift from government to governance is a tendency for
government to acquire an enhanced role in meta-governance. The latter refers
to the role of political authorities (at national and other levels) in directly
and/or indirectly organizing the self-organization of inter-organizational
partnerships and networks and inter-systemic relations. This is necessitated
by the limits to the proliferation of governance mechanisms. For the latter
could lead to an ever-increasing unstructured complexity, with the emer-
gence of governance failures as significant as market or state failures, with
growing loopholes for the unscrupulous to exploit, and with growing gaps
in ‘safety nets’ for the less fortunate (cf. Jessop, 1998). There are clear
dangers of this in CBRs without well-designed governance mechanisms. Thus,
in expanding their role in metagovernance, states assume responsibility for
constitutional design and other measures to ensure the relative compatibility
of different governance mechanisms. This is reflected in the Council of
Europe’s Convention on Transfrontier Cooperation and on EU regulations
governing the nature of partnership arrangements and consultation neces-
sary for the receipt of EU approval and funding. In addition, states (especially
at the national level) must still respond in the last resort to the political
repercussions of governance as well as market failure. Whether or not meta-
governance succeeds is, of course, quite another matter.
Third, there is a general trend towards the internationalization of policy
regimes. This refers to the increased strategic significance of the international
context of domestic state action and the latter’s extension to a wide range of
extraterritorial or transnational factors and processes (cf. Gamble and
Payne, Chapter 3). This tends to blur the distinction between domestic and
foreign policy and to widen the territorial bases of actors who are either
directly involved in decision-making and/or whose opinions and likely reac-
tions are taken into account. This trend is by no means confined to national
states. It also applies to supranational blocs (such as the EU), to local or
regional states, and, particularly clearly, to the newly emerging CBRs. For all
of these also need to take account of the changing international context of
their economic activities. This is inter alia reflected in attempts to combine
endogenous economic development with inward investment as well as to
engage in export promotion and/or import substitution activities in a
continually changing international economy.
There is a countertrend here too, albeit one with two aspects. On the one
hand, there is a growing interiorization of international constraints; their
integration into the policy paradigms and cognitive models of the world
held by various domestic policy-makers. On the other hand, there is a more
intensive effort, especially on the part of more powerful states, to influence
the form and contents of international regimes. The relative weight of this
trend and its countertrends will clearly vary with the place of a given
Bob Jessop 195

economic and political space within the more general economic and
political order.

Conclusion

There are many more cross-border regions and even more cross-border
regional projects than there are successful, well-functioning examples. The
feasibility of projects depends in part, of course, on the capacity of narra-
tives and other discursive forms to win support for projects, to enable appro-
priate forces to envision an alternative future and to identify the trajectory
to be followed in achieving it. But important extra-discursive conditions are
also needed to realize plausible strategies. These extra-discursive conditions
are rooted in the materiality of differentiated institutional orders (functional
sub-systems) and their complex forms of interdependence across various
spatial and temporal horizons of action; and in capacities to manage the
realization of projects over a range of interlocking spatial and temporal
horizons. This in turn depends on political will and leadership capacities,
including meta-governance capacities.
Hence no single (sub-)regional strategy is likely to become predominant.
Instead there will be a large number of small-scale strategic initiatives that
interact with an even larger number of more spontaneous developments
rooted in market exchanges, foreign direct investment, and so forth. Regional
economic strategies are most likely to develop on a local or regional scale
through decentralized collaboration and joint undertakings in which border
regions and/or economic affinities will play a key mediating role. The sheer
multiplicity of these initiatives can be seen from a partial list of programmes
for economic renewal provided by Neumann for the Nordic–Baltic region.
These include: a new Hanseatic League, a Baltic Sea Region, the Mare Balticum,
a Euro-Baltic Region, a Scann-Baltic Political Space, an Ostseeraum, a severo-
baltiyskiy poyas (Nordic–Baltic Belt comprising the Nordic states and the
four Russian political entities of Murmansk, St. Petersburg, Karelia, and
Kaliningrad),5 and a Barents region centred on Norway and extending to
the Arctic, Baltic, and North Seas (Neumann, 1994: 67–8, 71; cf. Neumann,
Chapter 9). A similar profusion of projects exists for other regions in Europe
and Eurasia.
Whilst not all of these projects can succeed, many are likely to attract
political support and economic resources. Thus eventual regional configur-
ations will be complex, tangled, and an evolutionary (rather than fully
planned) phenomenon. If a new primary scale is to emerge, it is likely to be
at the level of the Triad (cf. Tussie, Chapter 6). This is particularly evident in
the EU (especially as it continues to widen and deepen its role in structuring
European economic space) and NAFTA (with the overwhelming dominance
of the United States); but there is also a growing regional division of labour
in East Asia and China is becoming a more significant player in this regard.
196 The Political Economy of Scale

Notes
1. On glocalization, see Brenner (1998) and Swyngedouw (1997); on glurbanization,
see Jessop and Sum (2000); on transnationalization, see Smith (2000).
2. Cyberspace is, in fact, far from evenly distributed or accessible and it does have
roots in specific places – the significance of this is discussed below.
3. The blue banana curves like a banana from Greater London through the Benelux
countries, northern France (bypassing Paris), and central Germany to end in
northern Italy.
4. See Sum (1999) on the Greater China growth triangle; Söderbaum (2002) on the
Maputo Development Corridor (MDC) in Southern Africa; Blatter (2000) on
sustainable development in Cascadia and the Euroregio Boden; Maskell and Törn-
qvist (1999) on the Øresund cross-border learning region that links metropolitan
Copenhagen and the southern periphery of Sweden.
5. Note that the Nordic–Baltic Belt proposal excludes both Poland and the German
Länder bordering the Baltic (cf. Neumann, Chapter 9).
11
The Weave-World: The Regional
Interweaving of Economies,
Ideas and Identities*
Morten Bøås, Marianne H. Marchand and Timothy M. Shaw

Introduction: the globalization/regionalization nexus

The study and practice of regionalism have attracted growing interest in


interrelated analytical and policy realms as globalization and differentiation
have likewise increased. Reflective of such attention, analyses and debates
have also proliferated with the end of the Cold War and the expansion and/
or emergence of regional schemes, such as the Association of Southeast
Asian Nations (ASEAN), the Asia-Pacific Economic Cooperation (APEC), the
Economic Community of West African States (ECOWAS), the European
Union (EU), the Southern Common Market (Mercosur), the North American
Free Trade Agreement (NAFTA) and the Southern African Development
Community (SADC), to mention but a few. The debate has also widened. At
least, it is beginning to be acknowledged that regional interactions and
organizations focus not only on states but also on continuing linkages
among a heterogeneous set of actors and realms, including states, econ-
omies/companies and societies.
Globalization and regionalization occur simultaneously. As processes of
social transformation they create winners and losers. Some groups of countries,
but perhaps to a larger extent groups and communities within them, have
gained from these processes. The starting point for our attempt to come to
terms with the globalization/regionalization nexus is therefore to acknowledge
that the impact from both these processes is highly uneven. It is, therefore,
imperative that we understand the outcomes of the globalization/regional-
ization nexus as products reflecting diversity, and not uniformity. Even the
most sophisticated systems of modern communication and the develop-
ment of integrated commodity and financial markets have not destroyed

* A previous version of this chapter was presented to the XIII Nordic Congress of
Political Science, Aalborg, Denmark, 15–17 August 2002. Comments from Björn
Hettne, Fredrik Söderbaum, Benedicte Bull, Terhi Lethinen and other participants in the
workshop on ‘regions and regionalization’ are highly appreciated.

197
198 Regional Interweaving of Economies, Ideas and Identities

cultural, ethnic, economic or political diversity. In fact, the globalization/


regionalization nexus has created a whole range of diversified patterns of
interactions and responses at the local, national, regional and international
levels. This suggests that we should not only analyze the interplay and various
roles played by the trio of states, firms and civil societies (NGOs, social
movements, etc.) in processes of formal regionalization, but also the inter-
section between the same set of actors within processes of informal region-
alization. It is our view that one important but neglected issue is the
relationship between formal and informal regionalization: that is, formal
regional agreements signed by states as well as those forms of regional inter-
actions that mostly emanate from non-state actors and that are not covered
by any formal agreement. Do they proceed in similar directions, or might
the formal project be heading in a different (opposite) direction from that of
its informal counterpart?
It is equally important to recognize that increasingly production and
commodity chains are creating regionalized regimes of wealth accumula-
tion, which encompass formal and informal processes of regionalization.
The post-Cold War era has changed the structure of the world from a single
clean and quite transparent bipolar system to a set of intricate networks of
strategic alliances and highly flexible markets. Added to these political and
economic transformations we also encounter formal/informal regionaliza-
tion nexuses in terms of ‘new security issues’, which defy easy control and
containment, such as drugs, gangs, guns, migration, networked terrorism
and so forth, as they involve a myriad of actors.
This is the kind of world order (or lack of order) that has led to the emergence
of regionalization processes as diverse as the growth triangles of Southeast
Asia, the corridors of Southern Africa and the alliances that are made and
subsequently broken in the wars in Central Africa. Other examples include
the importance of regional/global hubs and spokes (for instance Singapore’s
Changi Airport and container terminals) and regional river valleys (if one
addresses formal/informal nexuses, one will recognize the importance of
river basins, such as the Mekong, the Nile and the Danube). The role of rims
and archipelagos of the seas as regional meeting places (with respect to both
formal and informal regionalization) is another under-explored theme. We
are convinced that a new regionalisms approach influenced by post-
structuralism and oriented towards the historicities and contexts of the
actors involved will provide important insights.
By focusing on these elements and phenomena we are not arguing that
they have not been studied before (obviously they have). Nor are we claiming
that other more traditional approaches to regionalization are useless. They
are not. They all give food for thought, and with some of them, in particular
the new regionalism approach (NRA), we clearly share common ground.
(cf. Hettne, Chapter 2). However, we remain critical of the functional element
in this approach (as apparent in its understanding of regionness) and sceptical
Morten Bøås, Marianne H. Marchand and Timothy M. Shaw 199

towards the search by the main theorists for universalism and a single Inter-
national Political Economy (IPE) of regionalism (see Hettne and Söderbaum,
1999 and 2000; Söderbaum, 2002). To be more precise, what differentiates
what we define as the new regionalisms approach is a deliberate focus on
how nexuses of globalization and regionalization have created a whole
range of diversified patterns of interactions and responses at the local,
national and regional levels. The informality of much of these processes
suggests that they cannot be neatly broken down into narrowly defined
objects of study: how processes are increasingly acquiring a regional dimen-
sion but do not necessarily situate themselves exclusively at the regional
level. What is occurring instead, and should be acknowledged, is a ‘nesting’
of processes and activities; as such, they ‘spill over’ from one level to the
next (cf. Jessop, Chapter 10). Despite this nesting it is clear, however, that
processes and activities of a regional scope have become increasingly
important.

A regionalized world?

As we recently entered a new millennium our world is increasingly becoming


globalized and regionalized. However, as such, these processes are not very
new. The liberalization of markets is not a new phenomenon, while trade
and production, ideas and identities have been interwoven across borders
throughout history. A regionalized world is therefore not a novelty, but an
integral part of human history. We find the first traces of regional systems
between Egypt and the Mediterranean around 7000 BC (Bøås, 2002). What is
new, however, is the pace of change and intensity of interactions due, in
particular, to technological inventions and improvements. This suggests
that significant changes have taken place with regard to various systems’
interaction capacities. This concept thus refers to the amount of transportation,
communication and organizational capacity within a system – the cost to
transport material and immaterial entities over what distance and at what
speed. It is concerned about technologies and institutions, norms and rules
(Buzan and Little, 2000). The higher the interaction capacity spread across a
given system, the ‘smaller’ this system will be perceived as. This means that
we see increased globalization and regionalization as a consequence of what
Harvey (1989) calls time–space compression; a shrinking world is made possible
by bursts of time–space compressions. These bursts reduce the constraints
on human activity imposed by time and space. The main factor that allows
us to annihilate space by time compression is technological developments
and breakthroughs. Relative size and distance are determined by the
speed of transportation. According to Harvey (1989), therefore, the world of
the 1960s was one-fiftieth the size of the sixteenth-century world. Increased
international functional integration made possible by time–space compres-
sion has, in turn, led to the emergence of a global scene of accumulation,
200 Regional Interweaving of Economies, Ideas and Identities

consumption, distribution and production, and equally important, identity


and differentiation. It is precisely the trend to further conflation of time
and space that makes our era the age of combined globalization and region-
alization.
During the past decade foreign direct investment (FDI) grew three times
faster than trade and four times more than world output annually. We have
witnessed a similar expansion of cross-border alliances and strategic man-
agement arrangements, which have resulted in an increasingly intercon-
nected or networked global political economy.1 This globalization of
production as well as the liberalization of markets – facilitated by neoliberal
privatization of state enterprises and deregulation of public control over the
economy – poses an entire new set of challenges to public authorities, eco-
nomic agents and social actors in both developed and developing parts of
the world (cf. Hettne, Chapter 2; Gamble and Payne, Chapter 3). We therefore
find it most fruitful to address globalization as a process of global restructuring
of the political economy at all levels. This means that we see globalization
as a multidimensional process, which transforms and influences not only
the economic space of society, but also its political and social spaces
through increased functional integration (precisely what Harvey calls space–
time compression).
Material flows of production, technology and financial resources are
important, but at the same time just one part of the larger picture of globali-
zation. In our view, the globalization of ideas and identities is as important
as the globalization of material flows in the global political economy. Rather
than specifically identifying a process, our usage of the term ‘globalism’
therefore captures the non-material dimensions of globalization, including
the ideas and identities that are being transformed, as well as, or perhaps
even more, the ideology that promotes global restructuring (cf. Gamble and
Payne, Chapter 3). Globalism must therefore be understood as a particular
actor’s political project in pursuit of a globalization strategy. The actor or
unit may be a transnational corporation (TNC), but it can just as well be a
state, groups of states or groups in civil society that pursue a globalization
strategy in order to obtain their objectives. It should be emphasized that not
only proponents of neoliberal globalization globalize their political strategies.
Opponents of global restructuring, or rather what they perceive as neoliberal
globalization (projects), do likewise.
One of the reasons for this is that oppositional groups, such as labour
unions, environmental and women’s groups, are in the midst of adjusting
their strategies to the new situation and requirements imposed by global
restructuring (Grewal and Kaplan, 1994; Gills, 2000; Murphy, 2001). In
other words, old strategies, which had been developed in the context of the
post-Second World War developmentalist and Keynesian welfare states, no
longer suffice. As global restructuring involves profound transformations of
economies and identities alike, it is creating a ‘new state of being’. This new
Morten Bøås, Marianne H. Marchand and Timothy M. Shaw 201

state of being and its consequences for our understanding of the world
around us is best captured by the term ‘globality’, which confers the notion
that current transformations provide people with a new frame of reference,
removing them from modern(izing) nation-state-centred thinking to the
global–local dyad as a starting point (Albrow, 1996; Castells, 1998). In other
words, as we experience continued time–space compressions, our way of
relating to the world changes. However, this new state of being, or globality,
is not similar across the world. The forces behind these phenomena may be
similar, but local impacts as well as interpretations of them can differ signifi-
cantly. The world is increasingly globalized, but not necessarily becoming
more uniform.
Regionalization is closely related to globalization. Regionalization pro-
cesses constitute an important dimension of global restructuring, but they
have an explicit spatial articulation. Processes of regionalization can be
state-led, but do not necessarily need to be. Within each regional space
there will be several regional projects, several regional ideas, identities and
economies, and therefore also more than one actor pursuing regionaliza-
tion. The state is most often one of the regionalizing actors, but equally
important actors can be identified within the two other realms of the state–
society–economy triangle: NGOs, new social movements, media, companies,
as well as a range of actors based in the second economy or the informal sector.
In sum, our argument is that, on the one hand, regionalization can be seen
as an integral part of globalization processes (i.e. the transformation of the
global political economy). On the other hand, however, it can also represent
formal (state-led) counterforces against globalization (as part of a broader
economic development strategy), or it can reflect a societal amalgam of
transborder activities through networks of the second, or underground economy.
This is precisely why we prefer to talk about globalization/regionalization
nexuses.
Regionalism should therefore be understood in a similar vein to that of
globalism. Regionalism concerns the ideas, identities and ideologies related
to a regional project. As such, regionalism is clearly a political project, but
it is obviously not necessarily state-led, as states are not the only political
actor around. As indicated earlier, we clearly believe that within each
regional project (formal or not) several competing regionalizing actors with
different regional visions and ideas coexist. These regionalizing actors
provide the ideational content of the region. In other words, they are
involved in processes of ‘making the region into a region’, and in these
processes they also reconstitute themselves as regionalizing actors within a
specific regional space.2 Sometimes various regionalizing actors are working
in a similar direction, whereas at other times they are in open conflict with
each other. The question of regionness and regionality is closely related
to such processes (cf. Hettne, Chapter 2). Deepening of interaction and
cooperation among and between regional actors may lead to the emergence
202 Regional Interweaving of Economies, Ideas and Identities

of what may be called regionness or regionality. These concepts have to


do with the relative convergence of dimensions such as cultural affinity,
political regimes, security arrangements and economic policies (i.e. relative
sameness).

Theorizing regionalization

In the past, functionalist and neofunctionalist approaches dominated the


study of regionalization or, as it then was called, regional economic and
political integration. There was a virtual symbiosis between the ideas about
political and economic integration and the actual integration process of the
European Community (EC). This was the laboratory and the case study per
se, and the result was that the European integration process soon became
the blueprint for regional integration elsewhere, especially in the ‘South’.
Theorizing about European integration was, on the one hand, informed
by classical economic ideas about how to create first a customs union, then
a common market and ultimately an economic and monetary union. On
the other hand, political scientists, interested in preventing war through
designing a security community, theorized about the need to develop
a socially and politically integrated community (Deutsch et al., 1957). Such
a community was supposed to emerge through either (i) practical and
technical cooperation (as functionalists would have it) or (ii) an elite-led
process (according to the neofunctionalists). The slowdown in European
integration combined with total failure of similar integration schemes
in the ‘South’ during the 1970s meant that these ideas were put on ice
(cf. Mistry, Chapter 7).
Currently, regionalization is once more at the forefront of International
Relations (IR). This renewed interest has been accompanied by the emer-
gence of new theories and approaches to regionalization. Some of these new
approaches have moved beyond the earlier functionalist logic and provide
new explanations for its occurrence,3 whereas in many of the other new
theories and approaches it is interesting to note the resilience of functional-
ism and the European experience as the yardstick for all other regional
arrangements. One of the most interesting of the new set of approaches to
regionalization is the new regionalism approach (NRA) developed by Björn
Hettne and Fredrik Söderbaum, and collegues at the Department of Peace
and Development Research (PADRIGU) at Göteborg University (cf. Hettne,
Chapter 2).4 This approach analyzes regionalism, regionalization and trans-
national cross-border flows and interdependencies in a global perspective
through historical, multilevel and multidimensional perspectives. Thus
regionalization is seen as a ‘complex process of change taking place simultan-
eously at three levels: the structure of the world system as a whole,
the level of inter-regional relations and the internal pattern of a single
region’ (Hettne, 1994: 10). This approach represents a clear break with
Morten Bøås, Marianne H. Marchand and Timothy M. Shaw 203

conventional theories about regional integration and cooperation, and as


such constitutes one avenue of inquiry that has widened our understanding
of regionalization.
What we find problematic with this approach is its implicit tendency to
use highly institutionalized forms of regionalization, the EU in particular, as
the norm for understanding contemporary practices and processes of
regionalization. Hettne (1994: 12) provides a good illustration when he
argues ‘Europe represents the most advanced regional arrangement the
world has seen, and it will consequently serve as our paradigm for the new
regionalism’. The same kind of heritage from the classical studies of region-
alism we also find in more recent publications from key authors writing
from this perspective.
According to Hettne (Chapter 2) it is possible to distinguish between five
‘degrees of regionness’. These are (i) region as a regional space, delimiting
more or less natural physical barriers and marked by ecological chacteristics;
(ii) region as a regional complex, with relations of various nature between
groups in different localities (a security complex is one expression of this
kind of system); (iii) region as regional society, which can be either organized
or more spontaneous and this can be in any of the cultural, economic, polit-
ical or military fields; (iv) region as regional community, which takes shape
when an enduring organization framework (formal or informal) promotes
social communication and convergence of values throughout the region;
and (v) region as regional institutionalized polity with a distinct identity, actor
capability, legitimacy, and structure of decision-making. The major implica-
tion from this typology is that it is easier for a regionalizing actor to pro-
mote increased regionness if the region already can be identified as a ‘spatial
and territorial subsystem’ (Hettne and Söderbaum, 2000). We find this
typology useful, but it should in our view not be seen as a blueprint or ideal
type over various stages of regionness. Here we are in disagreement with
Hettne who also argues that ‘regional space’ is the first step on the staircase
of regionness, and that based loosely on the European historical experience
one can speak about the five levels of regionness as ‘a natural history of
regionalization’ (Hettne, 2002b: 35). Such a functional view of regional
processes is at best misleading and at worst wrong. Regions are social con-
structions. They are imagined by regionalizing actors, but also constructed
through social practice. The concept of regionness is therefore best applied
as a tool to help clarify our thinking about complex regional processes. It
should not be used as an ideal model in which various regions move
through stages of regionness towards increasingly higher levels of it.
Our position vis-à-vis Björn Hettne, Fredrik Söderbaum and the NRA is
therefore ambivalent. On one hand we clearly share many of the same concerns,
and we remain convinced that their approach constitutes one of the most
useful starting points for thinking about the role of regions at various levels
of the world political economy, as it is less imbued by the state-centrism and
204 Regional Interweaving of Economies, Ideas and Identities

statism found in so much of the literature on regional organization. On the


other hand, we also have as a deliberate aim to challenge the NRA by mapping
out a research agenda, which emphasizes that a multitude of overlapping,
disjunctive and often contradictionary regionalization processes are cur-
rently going on. It is important to address these terms in the plural rather
than the singular form. We therefore prefer to talk about regionalisms rather
than regionalism. There is nearly always more than one vision of the region
and more than one regionalizing actor (Bull and Bøås, 2003). Sometimes
various regional visions, actors and processes are in coherence with each
other, but just as often they are fiercely competing against each other.
Equally important, our research strategy is to move further above, below
and beyond the state than the NRA is willing to go. There is so much more
to current regionalization processes than whatever can be captured by a
focus on states and formal regional organization. In many parts of the
world, what feeds people, organizes them and constructs their worldview is
not the state and its formal representations (at local, national or regional
levels), but the informal sector and its multitude of networks, civil societies
and associations (again at many levels). Of course, people participate not
solely in the formal or the informal sector. Rather, they move in and out of
both, and it is precisely these kinds of interactions and the various forms of
regionalism that they create which studies of regionalization should try to
capture.5
The examples we put forward as we seek to illustrate and elaborate a few
of our points are mainly confined to the ‘South’. This does not mean that
we think that regionalisms in the plural form are only a Southern phenom-
enon. Regionalisms in the form of regionalized civil societies, associations,
networks – including small or larger and more well-organized criminal
networks – are just as readily encountered in Europe and North America as
in Africa, Asia and Latin America. We are so often blindfolded by the ways
we are taught to look at the Western world that we refuse to see what is
obviously present there as well.

The Weave-World – the region as social space

Our position is based on the idea that a region occupies a territory – material or
imagined – and as a territory it is basically an intersection of a heterogeneous
range of moving bodies: it is articulated, defined, remade and reconstructed
by the sets of movements that take place within it (Certeau, 1984). Regions
are not static, but changing continuously. This is as true for the EU, espe-
cially as it contemplates unique expansion from 15 to 25 rather diverse
members, as it is for the multitude of formal and informal regions and
regional arrangements elsewhere in the world. The West Africa region may
seem full of localized little wars and conflicts, but their causes and conse-
quences are connected through social structures, everyday practices,
Morten Bøås, Marianne H. Marchand and Timothy M. Shaw 205

discourses and regional historicities. In other words, the region has become
an important signifier for social practices because it is through this that
regions are being constructed and reified. For instance, existing conflicts in
Guinea-Bissau, Senegal, Liberia, Sierra Leone and Guinea create repercussions
and resonance in Côte d’Ivoire, Burkina Faso, Gambia, Ghana and Nigeria.
In other words, the West African region is a regional security complex, but
no matter what ECOWAS Cease-Fire Monitoring Group (ECOMOG) and its
proponents may argue, this is not a security community in the making
(Bøås, 2000, 2001). The region is an important signifier, but also a difficult
one due to its complexity and fluidity. West Africa is an important signifier
and so are the Pacific Rim, South Asian, Central Asian, Central America,
North America and the Caribbean. However, we should not make the mis-
take of drawing a connection between the region as signifier and contempor-
ary area studies because what started as a heuristic device ‘was soon
forgotten and the current maps of “areas” in “area studies” were enshrined as
permanent’ (Appadurai, 2001: 8). The point is a quite a simple one: area
studies tend to see their ‘areas’ as immobile entities consisting of enduring
properties, separated by durable historical boundaries. Instead what we need
is a political economy that sees geographies as dynamic entities defined and
redefined by all kinds of motion (such as trade, war, migration, ecology, and
so forth).
The delimitation of a region is therefore determined through social practice.
In other words, the boundaries of a region are being constructed and recon-
structed through discursive practices, that is, the region operates as signifier
(cf. Neumann, Chapter 9). As such, it is possible that various imagined
regional spaces overlap in concrete territorial terms. One example of the latter
is the clash in concrete territorial terms between Meso-America and Central
America.
A consequence of seeing regions being constituted through social practice
is that it helps us see a much broader social reality than the one constituted
by state-driven regional integration schemes. In many places in this world
these are fairly irrelevant as economic conditions are poor and poverty is
extensive. Floods, drought, famine and the AIDS pandemic contribute to
insecurity. Social and economic inequality is rising and formal employment
is often the exception and not the rule. As state structures collapse, there is
an increase in violence on all societal levels: from petty crime to regional-
ized civil wars (cf. Falk, Chapter 4). Often, collapse in one place paves the
ground for processes of regional implosion, in which country after country
or, just as often, various non-state actors from neighbouring countries, pene-
trate into vast areas of state collapse. This is true not only for West Africa.
The processes in and around Afghanistan in Central/South Asia, the Fer-
ghana Valley (Central Asia) and the Great Lakes Region also highlight this
point. In many places in this world, the most efficient integrating mechan-
ism is regional implosion as described here and not regionalizing processes
206 Regional Interweaving of Economies, Ideas and Identities

set in motion by states. The real integrating mechanism in West Africa is


not ECOWAS, but the informal networks and the conflicts and the wars that
emerge around these networks. The region is lived social space and this is
what we should seek to capture.
Regions are therefore also connected to the world economy in many ways
both formally and informally. Often these connections take the form of
complex cobwebs of political and economic relations, which have an eth-
nic, corporative or communal character. These kinds of networks create
their own regions. One example is the many networks that originate from
various parts of the Democratic Republic of Congo (DRC). Kivu in eastern
DRC is point of origin for an ethnic trading network constructed along
identity lines among the Nande. This network originates from Kivu and
stretches all the way to Dubai on the Arabic Peninsula and to Hong Kong in
Southeast Asia through Sudan and the many ports (in particular Mombasa)
along East Africa.6 Other Congolese networks are trading diamonds with
South African partners or are operating trade routes from Lagos to Kizangani
(Bayart et al., 1999). In spite of the seemingly permanent collapse of the
Somali state, the Somali Diaspora is still occupying a key-role in trade
between East Africa, the Persian Gulf and Italy. These networks are consti-
tuted by clan and family lines of identity, and their important role as
intermediaries in this trade is based both on historical tradition and on the
fact that they practise the same religion as their counterparts in the
Persian Gulf. Trade patterns are established on iterated social practices,
and they can be remarkably long-lasting. As such, the referent for these
trade practices is an ‘ethno’-region constructed around imaginary identity-
lines constituted by ethnicities, families and religion. The regional space
constructed upon these identities is the signifier that makes these practices
work.
Examples of similar practices are also plentiful in West Africa. One inter-
esting example is the religious brotherhoods in Senegal. Some of these
have a dominant position in trade between the Mediterranean and West
Africa, and between the United States and West Africa. The latter region is
specialized in trade of second-hand electronic equipment from the United
States. This kind of equipment is sold on markets all over West Africa. It is
perhaps this kind of experience that has led a young Sierra Leonean to talk
about ‘Africa as a continent comprised of second-hand nations’ (Utas,
2002: 2).
The point is therefore that events that manifest themselves on macro-levels
(for instance, the region) always originate from micro-level actions, but
micro-level actions are also framed by macro-level factors and events. Giddens’s
(1984) theory of structuration is one attempt to integrate these two levels.
Other social theorists concerned with this issue are Knorr-Cetina (1981) and
Long (1992). Knorr-Cetina argues for a micro-oriented approach to macro-
level phenomena:
Morten Bøås, Marianne H. Marchand and Timothy M. Shaw 207

I . . . believe in the seeming paradox that it is through micro-social


approaches that we will learn most about the macro order, for it is
these approaches which through their unashamed empiricism afford
us a glimpse of the reality about which we speak. Certainly, we will not
get a grasp of whatever is the whole of the matter by a microscopic
recording of the face-to-face interaction. However, it may be enough to
begin with if we – for the first time – hear the macro tick. (Knorr-Cetina,
1981: 41–2)

Thus, to study the practice of networked logic as spelled out above is to


make microscopic readings of how the regional order ticks. This implies that
we will have to start to take actors’ perspective of reality seriously – in other
words, trying to understand how actors perceive their reality and how they
seek to deal with it. It is in this light that Long (1992) proposes an actor-
oriented approach in order to capture emergent patterns, differential meanings
and strategies:

The interlocking of actor strategies and of individual and collective


projects generates social forms and commitments that shape future possi-
bilities for action. This dynamic interplay of emergent patterns, differential
meanings and strategies lies at the core of an actor-oriented perspective.
(Long, 1992: 9)

The logic of the network under the circumstance described above then
becomes the logic of unspoken (silent) knowledge: it is a condition often
based on uncertainty, unpredictability and lack of meaning. Reality is like a
fog; it cannot easily be penetrated, grasped or controlled (Mbembe, 2001). It
is under such circumstances that the entrepreneur and the logic of the net-
work become a necessity of life for those that inhabit such physical spaces.
It is also in this way that the entrepreneur becomes the manifestation of the
multitude of moving bodies that constitute the territory of the region. Here
we must add that our understanding of entrepreneurial activity is one that
goes well beyond the preconceived ideas based upon homo economicus – the
rational economic man (cf. Hettne, Chapter 2). Rather, we suggest that the
activities of the entrepreneur be placed in the social context in order to
understand the forces that shape his/her everyday activities, and the socio-
economic consequences of these activities. Entrepreneurial activity is therefore
socially embedded and based upon relations both in formal and informal
spheres of society (often the distinction between formal and informal is
purely cosmetic).
We believe that such a research strategy may enable us to incorporate into
our analysis a whole range of dimensions and practices that hitherto have
been considered outside of the domain of political and economic research
208 Regional Interweaving of Economies, Ideas and Identities

and the study of regionalization. If we want to study the political economy


of regionalization from below we must give agency to ordinary people and
their daily activities as well as the more formalized aspects of regionalization.
Our analyses should take into account the regional practices in the informal
border politics of small trade, of smuggling and crime, and the networks
and associations involved in these practices (Joenniemi and Viktorova,
2001; Bøås et al., 1999).
How then is this activity organized? Turning to these types of questions
we also see the inability to present adequate explanations for regionaliza-
tion without taking into account not only the role of ideas and identities,
but also how and in what way ideas and identities both facilitate the region-
alization of economies and themselves also become regionalized. From the
dawn of history, trade and trade relationships have been built on personal
ties based on, among other things, kinship, ethnicity and gender. Our point
is that we must include in our analyses how ideas and identities are creating
actors, which have a regional identity. This form of exchange built around
regionalized networks of economies, ideas and identities ‘involves indefinite,
sequential transactions within a general pattern of interaction, sanctioned
by normative rather than legal means. Rather than driving the hardest bargain,
as in market exchange, the aim of network exchange is to create indebtedness
and reliance over a long period; it is not obvious when a debt has been dis-
charged unlike what occurs in market exchange. In a market transaction,
participants are free of future commitments; in networks, transactions occur
through actions of individual engaged in reciprocal actions’ (MacGaffey and
Bazenguissa-Ganga, 2000: 12).
Traditional political science approaches to regional organization have
regarded material interests as the main motivational force underlying polit-
ical and economic change. Sociology has paid greater attention to the role
of ideas, identities and cultures in social change, but much of this research
has been consensus-oriented with a dualist schism between ‘values’ (includ-
ing ideas) and interests. Unlike these traditions, we wish to combine an
emphasis on conflict and the role of ideas in the construction of regional
organization and regional identities. Ideas, therefore, we see as mediums
through which individual and group interests are articulated, both by
formal government representatives and ‘from below’. We assume that the
social construction of regional identities has a major impact on the way
regionalization proceeds. These identities may be intended products,
manipulated by political and economic elites, but they may also ‘pattern’
the process of political interest articulation in a non-intentional way.7 It is
of crucial importance to approach these phenomena as processes and not as
a static condition. There is no such thing as a fixed identity of an individual
or a community. The identity of an individual as well as that of a com-
munity is always a becoming (Mudimbe, 2000). We are therefore constantly
confronted with shifting identities and flexible loyalties.
Morten Bøås, Marianne H. Marchand and Timothy M. Shaw 209

Conclusion

It is only when we make deliberate attempts to connect the two broad pro-
cesses of formal and informal regionalisms that we get a clearer picture of the
connections between them. Trade liberalization as a part of the state-driven
regionalization process can facilitate the regionalization of gun-running,
drug-trafficking and criminal networks, but formal regionalization in the
form of trade liberalization can also entail the regionalization of various
elements of civil society into a regionalized civil society that can become
a supporter of or a viable counterforce to the formal regionalization project.
The point is that the outcome of these processes is highly unpredictable,
and often there is more to these issues than meets the eye.
Here we find not only fragmented forces of regionalized civil societies that
try to carve out small niches for themselves within larger regional restruc-
turing processes, but also the warlords, the regional merchants and the
petty traders who may take advantage of liberalized markets in order to
decrease their costs in gaining access to regional markets, but who may also
be existing within a superstructure about which they have little knowledge.
Rather, what we are confronted with are juxtaposition, contradictory pro-
cesses and simultaneous cooperation and conflict interwoven into streams of
ideas, identities and more tangible resources. This is the weave-world, and
the weave-world we envision is a region of moving bodies and within an
ever-changing social space, which is increasingly becoming ‘regionalized’.
One credo for the regionalisms approach is therefore regional processes as
the politics of everyday life. Regionalisms are, after all, about social practice;
nothing more, nothing less.

Notes
1. 1990 was the first year in which worldwide sales of foreign affiliates exceeded
world exports.
2. One example of such activity is the regional development banks. These banks are
manifestations of regional cooperation, but they also help to frame further efforts
towards regionalization (Bull and Bøås, 2003).
3. In particular, critical political economy and critical security studies are shedding
new light on processes of regionalization, as well as on the emergence of regionalism
as a new world order phenomenon; see Gamble and Payne (Chapter 2), Breslin
and Hook (2002), Söderbaum and Taylor (2003) and Hentz and Bøås (2003).
4. The point of departure for the NRA was the now completed UNU/WIDER research
project, ‘The New Regionalism: Implications for Global Development and Security’.
For the results of this project, see Hettne, Inotai and Sunkel (1999, 2000a, 2000b,
2000c, 2001) also cf. Hettne and Söderbaum (1998), Schulz et al. (2001). After the
finalization of the UNU/WIDER project, Björn Hettne and Fredrik Söderbaum
initiated a post-UNU/WIDER phase in their study of the new regionalism, in
which they seek to move from the NRA towards a more coherent perspective,
i.e. a new regionalism theory (NRT); see Hettne and Söderbaum (1999, 2000),
Söderbaum (2002) and Hettne (Chapter 2).
210 Regional Interweaving of Economies, Ideas and Identities

5. Bach’s (1999) notion of trans-state regionalism is one attempt to capture such


processes.
6. Dubai in particular has become the hub for trade to and from Africa. This is not
new, but rather a renewal of old trade practice that was disrupted by colonialism.
Today it seems as if East Africa is returning to the old trade patterns and practices
of the Swahili-culture even if most goods now travel by airfreight and ocean con-
tainer rather than by dhow.
7. In both cases this can take place through what Foucault (1982) refers to as assujet-
tissement, or subjectification. This is a process where two meanings of the word
‘subject’ become socially constructed truths: subject to someone else by control and
dependence, or tied to his/her own identity by a conscience or self-knowledge.
‘Both meanings suggest a form of power which subjugates and makes subject to’
(Foucault, 1982: 212).
12
Conclusion: What Futures for
New Regionalism?
Fredrik Söderbaum and Timothy M. Shaw

Anyone following the development of international affairs in the post-Cold


War era will be struck by the revitalization and proliferation of regionalism. The
widening and deepening of the European Union (EU) is perhaps the most
recognized and debated example of this trend, but a rich variety of other formal
and informal regionalization processes can also be observed around the world.
This volume has taken as its point of departure the assertion that we need theory
in order to make the new regionalism more intelligible. The problem to date
has been a lack of systematic theoretical debate in the study of new region-
alism; but in our view this also constitutes a challenge, even an opportunity.
This collection has sought to overcome this lacuna by bringing together
leading authorities in the field from a variety of disciplines to develop and
define distinctive theoretical perspectives. The cutting-edge theories pre-
sented here reveal a fascinating and pluralistic world of new regionalism.
From their own individual standpoint and disciplinary background,
informed by particular cases, each contributor provides us with crucial
insights into the origins, dynamics and consequences of new regionalism,
with important implications for established disciplines and debates as well
as for regional policy and practice.
A related ambition of this book was to overcome the fragmentation in the
field and contribute to a more productive debate between different theoret-
ical standpoints, with relevance for broader disciplinary, inter-disciplinary
and even post-disciplinary discourses. This was triggered by the fact that we
anticipate a considerable scope for cross-fertilization and comparison
between theories compared to the state of the field today. In our view, theor-
ists should become more aware and conscious of similarities and differences
of other theorists’ assumptions and approaches. Needless to say, important
differences remain among various theories; but conversely, there are also
important similarities between them that come from different paradigmatic
starting points.
This final chapter draws some general conclusions from the rest of the
collection. Particular emphasis is placed on highlighting some main themes

211
212 Conclusion: What Futures for New Regionalism?

of the book to reveal similarities and differences between the theories with
relevance for policy and practice as well as analysis. There is also some dis-
cussion of the gaps or silences in the contemporary theoretical landscape,
which indicate where the field may (or in our view ought to) be moving in
the first decade of the new millennium. Of course, it is impossible to make a
fully-fledged summing-up of such a wide-spanning collection as this; what
some readers may regard as important issues may not always be very well
covered here, and still other readers may not necessarily agree with our
ideas for the future. Yet, it is our ambition that this concluding chapter
stimulates theory-building and above all discussion and communication.

General versus contextual theory: comparative regionalism


as a bridge

After the Second World War the study of regionalism, especially the ‘old
regionalism’, was dominated by an empirical focus on Europe. Although the
neofunctionalists were somewhat conscious of their own Eurocentrism, in
their comparative analyses they only searched for those ‘background condi-
tions’ and ‘spill-over’ effects that could be found in Europe (Hettne, Chapter 2;
Haas, 1961). During the era of such old regionalism, European integration
theories were developed for and from the European experience and then
more or less re-applied or exported around the world. All too often the EC/
EU was seen and advocated as the model, and other looser and informal
modes of regionalism were, wherever they appeared, characterized as ‘different’
or ‘weaker’. Such highly normative assumptions about European regionalism
continue to be a problem within the broader research field. As Breslin and
Higgott (2000: 343) correctly point out: ‘Ironically, the EU as an exercise in
regional integration is one of the major obstacles to the development of
analytical and theoretical comparative studies of regional integration.’
In sharp contrast with much of these conventional European integration
studies, however, the new regionalism theories articulated in this volume
point to the multidimensional and complex nature of today’s regionalism,
including the case of Europe. Today, especially as its significant expansion
proceeds, there are many overlapping, parallel and competing regionaliza-
tion processes in Europe, and no single perspective can claim to articulate
the hegemonic interpretation of ‘new regionalism in Europe’. The majority
of the contributions to this volume, some more than others, provide
insights into European regionalism. Clearly, they do not by any means por-
tray a monolithic view, but rather give testimony to the multidimensional
nature of European regionalism. This shows that the fundamental problem
is not the study of Europe per se, but rather the tendency in the field to
either ignore many of the alternative theories and cases of regionalism
(Mansfield and Milner, 1997) or even regard challenging approaches as
‘non-scientific’ or ‘speculative’ (Mattli, 1999: 3–16).
Fredrik Söderbaum and Timothy M. Shaw 213

This volume confirms that regionalism is a worldwide, not just European,


phenomenon. And contrary to many European integration scholars, such as
Christiansen (2001), Europe is not a unique case, dramatically different
from regionalism elsewhere. In fact, more or less all regions can be included
as cases in future studies of new regionalism. For example, as explicitly
pointed out by Bøås, Marchand and Shaw (Chapter 11), new regionalism in
Africa can readily provide stimulus to important (and previously over-
looked) facets of regionalism elsewhere as well. In consequence, we no
longer need to assume fundamental differences between Europe and other
regions in either approaches or practices, especially as the EU grows from
15 to 25 increasingly heterogeneous member states.
As we recognize the worldwide reach of the new regionalism as well as the
multidimensionality of regionalism within/between regions, then the con-
tentious issue of generalization versus contextualization becomes ever more
important. Several theorists in this volume make a call for ‘holistic’ and/or
‘contextualized’ theory, and often they emphasize the problems inherent in
‘misplaced’ generalization. For instance, according to Falk (Chapter 4),
‘[a]lmost any generalization about regionalism seems suspect and must be
qualified and reconsidered, as well as contextualized region by region’. Mistry
(Chapter 7) points out that ‘the analytical constructs provided by earlier
theories of integration [have] become obsolete. They need to be replaced by
a more holistic theory of regionalism’ (although Mistry himself argues that
in the absence of such theory, existing regionalism needs to be understood
through ‘pragmatic empiricism’). Hettne (Chapter 2) has consistently and
repeatedly argued that the multidimensional and pluralistic nature of new
regionalism creates a need for holistic theorizing and understanding. It
is, according to Hettne, inter alia ‘important to explore the contextual,
endogenous conditions relevant in each specific case of regional formation’.
Furthermore, Bøås, Marchand and Shaw (Chapter 11) are very critical of
what they interpret as many theorists’ search for ‘universalism and a single
International Political Economy (IPE) of regionalism’.
Nevertheless, none of the scholars just referred to are entirely clear on
what generalizations should and should not be made. Somewhat surprisingly,
Hettne (2001b: 22), for instance, has argued that ‘Europe thus represents the
most advanced supranational regional arrangement the world so far has
seen, and it may consequently serve as a paradigm for the new regionalism’.
This statement is what, particularly, provoked heavy criticism from Bøås,
Marchand and Shaw. But after condemning other scholars for their antici-
pated ‘misplaced’ universalism, Bøås, Marchand and Shaw themselves then
move on to claim that the types of regionalization processes highlighted in
their approach are ‘mainly confined to the “South” . . . [but] are just as readily
encountered in Europe and North America as in Africa, Asia and Latin America.
We are so often blindfolded by the ways we are taught to look at the Western
world that we refuse to see what is obviously present there as well.’
214 Conclusion: What Futures for New Regionalism?

The point raised here is that more or less all major theorists – regardless of
whether they are ‘holists’, ‘contextualists’ or more outspoken ‘generalists’ –
make claims that are more or less ‘general’ (universal), in the sense that
‘their’ regionalization processes can be observed around the world. At least
for the ‘interpretivists’/ ‘contextualists’, it is not unproblematic to use concepts
such as ‘states’, ‘markets’, ‘civil societies’, ‘globalization’, ‘regionalization’
across-the-board as they in fact often tend to do. In our view, there are no
ready-made solutions, but what we suggest is that future theorizing needs to
be more explicit on important issues, such as when and where their frame-
work is and is not applicable, the relevance and ‘reach’ of their frameworks/
analyses, and to what extent theories and arguments are generally or con-
textually confined (and what that means).
We also suggest that the comparative approach can serve as a bridge
between theory and practice, between misplaced universalism and context-
ual obsession. General theory and to some extent comparative studies are
often criticized by those emphasizing deep multidisciplinary knowledge of
various contexts, cultures and peoples. There are undoubtedly a circulation
of too many culturally skewed theories and comparative frameworks, and if
not placed in proper historical context many of these are misleading and at
worst even harmful (because of their prescriptions). We believe it is crucial
to move beyond the false universalism inherent in a selective reading of
regionalism in the North in general and in Europe in particular (because it is
mainly from here the so-called general frameworks derive). Having so recog-
nized, it is our contention that the comparative method helps to guard
against ethnocentric bias and culture-bound interpretations that can arise in
a too specialized area study.
Buzan (Chapter 8) may be cited as one theorist trying to provide such a
comparative framework. Through his theory about regional security complexes
Buzan seeks to construct a set of concepts that can be used by area specialists
in order to frame comparative studies. In a similar fashion, Hettne (Chapter 2)
elaborates on the concept of ‘regionness’ as ‘a framework for comparative
analysis of emerging regions’. But Hettne is at the same time somewhat cautious
of across-the-board comparisons, and in his view an appropriate comparison
is of regions at similar stages of sophistication. In this way Hettne appears to
be somewhat more contextually sensitive compared to Buzan’s more general
framework. This is not the place to enter into a discussion about right and
wrong on this matter. But these examples illustrate the fact that there exist differ-
ent ways to look upon the comparative method and many possible ways of con-
ducting comparison, for instance in time, between regions, within regions,
and so forth. Our main suggestion is that it should be used more widely, but
also in a more nuanced way, recognizing both its strengths and limits:

For when conducted properly, the comparative approach is an excellent


tool . . . In particular, it is a key mechanism for bringing area studies and
Fredrik Söderbaum and Timothy M. Shaw 215

disciplinary studies together, and enhancing both. It provides new ways


of thinking about the case studies whilst at the same time allowing for
the theories to be tested, adapted and advanced. (Breslin and Higgott,
2000: 341)

Considering the amount of case study research in the field, it may be sur-
prising that there is still a lack of systematic comparison in the burgeoning
field of new regionalism, some exceptions being Hettne et al. (2001), Buzan
et al. (1998), Schulz et al. (2001). Comparison can provide an opportunity for
different theoretical standpoints to communicate, where explanatory and
interpretative theory can debate and even cross-fertilize.

New regionalism and (uneven) globalization

The apparent revival as well as redirection of regional projects and studies


towards the end of the last century constituted a telling indicator that glob-
alization was not a singular, universal project; alternative reactions and
directions were also possible. Still, the conventional discussion – about
whether regionalism constitutes a stumbling-block or a building-block
towards multilateralism – continues to influence much of the discussion in
the field. This book has drawn attention to the limits of this (infamous)
dichotomy, and to the fact that a unilinear relationship or a simple dichotomy
between globalism/multilateralism and regionalism needs to be challenged.
In fact, more or less all theorists in this volume (albeit some more than others)
state that linear developments are the least likely as globalization and
regionalization produce their own counterforces with mixed outcomes in
different regions. In addition, the dichotomy is reductionist in its content
since both ‘economic globalists’ and proponents of regions as ‘stepping
stones’ neglect the turbulence and contradictions inherent in the globaliza-
tion/regionalization dyad (cf. Jessop, Chapter 10; Bøås, Marchand and
Shaw, Chapter 11). Furthermore, in spite of sharing several assumptions
with liberal theorists and economists who originally constructed the dichotomy
in the first place, Tussie (Chapter 6) draws attention to a more subtle under-
standing. Tussie argues persuasively that

regionalism thrives in the policy spaces left by multilateralism but that at


the same time when these lacunae are too many or too wide these ten-
sions are then re-played in the multilateral sphere. In this sense the focus
on these neglected games allows us to move away from one-dimensional
views that posit regionalism and multilateralism as dilemmas of build-
ing-blocks versus stumbling-blocks.

It should also be said that the dichotomy is formulated and defined from a
particular standpoint whereby the end-goal of globalization/multilateralism
216 Conclusion: What Futures for New Regionalism?

automatically becomes the ‘best of all worlds’. Thus, the stepping-stone/


stumbling-block dichotomy has, clearly, been formulated ‘for someone and
for some purpose’ to use Coxian language. One result of this critical attitude
of the project of economic globalization is that politics of assorted kinds has
again been recognized to be important for both empirical and normative
reasons. Hettne (Chapter 2) develops a comprehensive argument in favour
of ‘the return of the political’. His argument is that according to the non-liberal
and more sceptical view the liberal project of globalism is not realistic; the
unregulated market system is analogous to political anarchy, and conse-
quently there is a need to ‘politicize the global’. Basically this is congruent
with Gamble and Payne’s (Chapter 3) view:

In short, preservation of the human species would require the subordin-


ation of the principles of free-market individualism to those of social regu-
lation and community . . . This view effectively reinstates the dialectic of
history, providing for one more stage beyond Fukuyama. It receives some
support from the logic of interdependence stressed by the neoliberal
institutionalists, which also points to the possibility of a new era of regu-
lation at a global level, following the undermining of the sovereignty of
nation-states. The new regionalism is an essential step towards this.
(Gamble and Payne, Chapter 3)

So, in spite of Gamble and Payne’s affiliation with critical IPE they present
an opening for liberal arguments favouring social regulation. It should be
noted that both Tussie (Chapter 6) and Mistry (Chapter 7), a pair of eminent
theorists of ‘liberal’ disposition, are very concerned with the asymmetries
and imbalances created by globalization, multilateralism and regionalism.
Notwithstanding their affiliation this is a concern they share with a range
of other more radical scholars from different traditions, such as Hettne
(Chapter 2), Gamble and Payne (Chapter 3), Falk (Chapter 4), Jessop
(Chapter 10) and Bøås, Marchand and Shaw (Chapter 11). What this shows is
that there are many opportunities as well as imperatives for a continued, intrigu-
ing debate, stretching beyond the first decade of the new century, among vari-
ous empirical and theoretical standpoints and results around ‘new regionalism’.

New regionalism and (post-)Westphalianism

Several contributions in this volume share the view that the Westphalian
nation-state is not functioning, while the ultimate manifestation of the
post-Westphalian model – globalization or fully-fledged multilateralism – is
also seen as premature. Mistry (Chapter 7) elaborates on this issue in detail.
One important part of his argument is that the Westphalian model is obsolete,
but multilateralism is not functioning either, with the result that regionalism
has emerged as a feasible mid-level management strategy. Similarly, Hveem
Fredrik Söderbaum and Timothy M. Shaw 217

(Chapter 5) argues that ‘the regional project becomes a strategy whereby


actors may handle the challenges posed by globalization in a situation
where the nation-state is insufficient in that respect’.
According to Hettne (Chapter 2), regionalism can be part of neo-
Westphalian governance patterns (i.e. building on the nation-state system),
but it can also be part of a post-Wesphalian pattern (i.e. transcending the
nation-state system). His own normative position favours the latter category,
although the former should not be ruled out. In elaborating on this he
draws on the verbal power of Falk:

Westphalia modes of regulatory authority are already insufficient and


will turn out to be more so in the future, but that Westphalia resistance
to adjustments by the leading centres of state power will remain formidable,
blocking creative innovations. In the face of this reality, the movement
for humane global governance (the preferred post-Westphalia scenario) is
likely to grow stronger. It may, however, be inclined to aim for and
accept neo-Westphalia modifications of statism that realise the normative
(ethical and legal) potential of a statist world. (Falk, 2002: 180, quoted in
Hettne, Chapter 2)

By way of moving on, Hettne argues that although the possibility of global
human community should not be excluded, a regional political community
is logically prior to it. ‘Coexisting regional communities . . . may be the best
world order we can hope for in the medium-long term. . . . As formal macro-
regions emerge and take a political actor role, there will necessarily also be a
need for more organized contacts between these regions’ (Hettne, Chapter 2).
In this context Hettne draws attention to a phenomenon which has quickly
emerged as a bridge between multilateralism and regionalism and/or
between a Westphalian and a post-Westphalian pattern, namely inter-
regionalism (cf. Telo, 2001). According to Hettne,

Inter-regionalism, which now has become an established empirical fact,


can provide a compromise between Westphalian and post-Westphalian
logic; between territorialism and supra-territorialism. Compared to glob-
alization, inter-regionalism is more rooted in regional formations, and in
contrast to multilateralism it is an exclusive relationship based on conscious
political strategies. (Hettne, Chapter 2)

Mistry is yet another author elaborating on the novel phenomenon of inter-


regional relations. ‘Multilateralism will work effectively when it is built on
interaction among fewer regional blocs that are more equal in economic
and political size’ (Mistry, Chapter 7). In addition, Hveem (Chapter 5) analyses
several modes and projects of inter-regionalism in detail, such as the Asia-
Europe Meeting (ASEM), the Asia-Pacific Economic Cooperation (APEC),
218 Conclusion: What Futures for New Regionalism?

EU–ACP and the EU–Mercosur relationships. Hveem argues that there is


a visible dynamism in current inter-regional projects, which in his view
primarily can be explained along two dimensions: (i) ‘as an expression of
the hegemon’s strategy or as a response to it by other actors’; or (ii) ‘as an
alternative to the Great Power concert, the G8, and as a supplement to
global institutions’.

New regionalism and regional space

Understanding new regionalism requires an understanding of space, which


moves beyond the conventional preoccupation with the national scale and
the space-as-container schema prevailing in mainstream thinking. Jessop
(Chapter 10) emphasizes that during the ‘thirty glorious years’ of post-
Second World War economic expansion, it was the national scale that dom-
inated. This is no longer the case and for a wide range of reasons we are now
witnessing a ‘relativization of scale’, according to which the state’s territory
is only one of a number of different geographical scales. From such a per-
spective, there is no pre-given set of spaces and scales; instead new spaces
emerge or existing ones gain in ‘thickness’.
What is evident from the diverse contributions to this collection is that
‘regional space’ is increasingly becoming much more elusive and multifa-
ceted both conceptually and concretely, at least compared to what was the
case during the era of old regionalism which featured the dominance of
national space. One may, of course, continue to identify myriad ‘regions’ as
defined in advance of research, or as ‘given’ regional organizations. But as
soon as we move away from one-dimensional and hermetically sealed
understandings of regional space, then the region automatically becomes
more fluid and multilevel.
For such analysts, studying regions means working with elusive entities
and fuzzy boundaries in the midst of an emerging structural change in world
(dis)order. Many contemporary developments and processes in world politics
or the global political economy are complex and sometimes contradictory.
According to Bøås, Marchand and Shaw (Chapter 11) the region should be
understood as lived social space whose delimitation is determined through social
practice. ‘In other words, the boundaries of a region are being constructed
and reconstructed through discursive practices, that is, the region operates
as signifier. As such, it is possible that various imagined regional spaces over-
lap in concrete territorial terms’ (Bøås, Marchand and Shaw, Chapter 11).
Neumann is another example of basically the same line of thinking:

This examination of post-Cold War discourse on Northern Europe does


indeed illustrate that the region-building approach is vindicated in holding
that multiple alien interpretations of the region struggle, clash, deconstruct,
and displace one another. Whereas a number of statements made by
Fredrik Söderbaum and Timothy M. Shaw 219

representatives of the ‘Nordic’ states continue to acknowledge the exist-


ence of a ‘Nordic’ region, nearly all are quick to stress that the continued
existence of such a region is not contradictory to the forging of a new
Baltic Sea Region. (Neumann, Chapter 9)

In spite of the above, the large majority of studies of regionalism in the field
have been concerned with the macro-regions rather than meso- and micro-
regions. This has led to an under-emphasis of the heterogeneity and pluralism
of regionalism as well as micro-issues ‘on the ground’. In the future, then,
taking the insights from this reader into account, we would suggest that the
study of regionalism should not be concerned solely (or simply) with
macro-regions. It should be said that micro-level forms of regionalism may
sometimes be less formal/inter-state than the formal macro-regions; they
may be more reflective of private sector interests than those of either states
or civil societies, as in many corridors or triangles. There are many interesting
insights to be drawn from various micro-level processes, such as growth
triangles and export processing zones (EPZ) in East and Southeast Asia, old and
more recent corridors in Southern Africa, maquiladoras along the US–Mexico
border as well as the Euroregions in Europe (cf. Perkmann and Sum, 2002;
Söderbaum and Taylor, 2003).
In the past, overly sharp distinctions have been made between micro- and
macro-regions. But if regions are made up by actors other than states alone, and
if even state boundaries are becoming more fluid, then it also becomes more
difficult to uphold old distinctions between micro- and macro-regions. What
is particularly important to acknowledge is that the various spaces are intimately
connected: the latter can trigger reactions and responses at the former scale
(or vice versa). For example, Jessop (Chapter 10) asserts that ‘Europeanization
requires coordination of regional policies . . . the development of the North
American Free Trade Agreement (NAFTA) has prompted the formation of
the Cascadia region, stretching from Alaska to Oregon and North California.’
The macro–micro relationship can also be seen in what can be understood
as the expansion/dilution syndrome. The enlargement of a region’s always
somewhat fluid boundaries in terms of participants, issues or sectors affects its
functioning. In particular, as is apparent in recent cases from the EU to
the Association of Southeast Asian Nations (ASEAN) and the Southern
African Development Community (SADC), this expansion/dilution syndrome
may reinforce lower-level regional dynamics, leaving state and non-state
actors alike to concentrate their energies at a more meso- or micro-level.
Thus, in Southern Africa the unwieldy enlargement of SADC to include the
problematic state of the Democratic Republic of Congo (DRC) has already
reinforced processes of ‘variable geometry’ and ‘multispeedism’ within that
region, and renewed concentration of energy on other regionalist projects,
as well as novel corridors and cross-border micro-regions (Söderbaum and
Taylor, 2003).
220 Conclusion: What Futures for New Regionalism?

Several analyses in this volume indicate that in the post-Cold War era no
single scale is dominant. This is leading to a variety of scales and places
interacting with one another in time and place. The tendency to see a plur-
alism of regional levels and regional actors is likely to lead to an increasing
pluralism of regional definitions, scales and spaces – mega-, macro-, meso-, sub-
and micro-regions – all of which are intertwined with globalization, inter-
regionalism and national spaces. In such a situation it becomes increasingly
difficult to distinguish what is ‘regional’ from what is not. However, the
solution is not a return to a simplistic past; the future of regionalism must
not spell a return to the illusion of hermetically sealed regions and regional
borders. As already indicated, the future lies in more precise definitions and
increased emphasis on explaining what, exactly, is ‘regional’ and what is not.

New regionalism and regionalizing actors

Many regional theorists demonstrate that we do not really have to consider


whether ‘states’ have been and in several respects remain important region-
alizing actors. In fact, even at the start of the new millennium, regionalism
can still be dominated by state actors. In other words, states, ‘countries’
and interstate organizations are certainly crucial objects/referents of
analysis and actors in the process of regionalization, though some analysts
and approaches still privilege them more than others. Clearly, it is import-
ant to continue to study ‘states’ and ‘countries’, however defined.
Notwithstanding, one major weakness in IR/IPE more broadly, as well as
mainstream regionalism studies more specifically, is that ‘states are treated
as if they are the ontological and moral equivalents to individual persons’
(Agnew, 1998: 3, de-emphasized). Or as Neumann (Chapter 9) puts it, ‘the
nation-state takes on the hyper-real quality of the simulacrum: the meta-
phorical family of the nation-state becomes more real than the family itself’.
The problem is that the state is seen as the main spatial category and actor
in a hostile and anarchical world. Equally important, the metaphor carries
with it a specific and often misleading notion of who and what is ‘inside’
and ‘outside’. Neumann’s region-building approach (Chapter 9) is an excel-
lent tool for addressing these problems. It is well-suited to unpack the ‘unitary
state’ and problematize the so-called national interest. This can be done

by asking questions about how and why the existence of a given region
was postulated in the first place, who perpetuates its existence with what
intentions, and how students of regions, by including and excluding cer-
tain areas and peoples from a given region, are putting their knowledge
at the service of its perpetuation or transformation. (Neumann, Chapter 9)

By the same token, in The Political Economy of Regionalism in Southern Africa,


Söderbaum (2002: 173–4) ‘unpacks’ the state and addresses the question of
Fredrik Söderbaum and Timothy M. Shaw 221

for whom and for what purpose regionalization is being pursued in this
intriguing region. The author shows how ruling political leaders engage in a
rather intense diplomatic game, whereby they praise regionalism and sign
treaties, such as free trade agreements and water protocols. By so doing, they
can be perceived as promoters of the goals and values of regionalism, which
enables them to raise the profile and status of their authoritarian regimes.
This social practice is then repeated and institutionalized at a large number
of ministerial and summit meetings, which in reality involves no real debate
and no wider consultation within member states (Simon, 2003: 71). For the
political leaders, it is a matter of constructing an image of state-building and
of promoting important values. Some analysts would perhaps try to portray
these activities as a means to promote the ‘national interests’ of the ‘states’.
However, in many cases the so-called ‘state’ is much less than what it pretends
to be: the type of regionalism designed to enhance the reproduction-
legitimization of the state is exclusivist and centralized, ‘reflecting the percep-
tions of government leaders, small groups of civil servants and perhaps also
key bilateral and multilateral donors’ (Simon, 2003: 71). Often the ‘state’ is
not much more than a (neopatrimonial) interest group, and in the worst
cases it has degenerated into a post-modern mafia syndicate, such as in
Zimbabwe. Furthermore, although the rhetoric and ritual of regional diplomacy
serves the goal of the reproduction-legitimization of the state as such, it can
also be a means to create a façade enabling certain regime actors to engage
in other more informal modes of regionalism, such as trans-state regionalism
or networks of plunder (cf. Bøås, Marchand and Shaw, Chapter 11).
Closely related to the need to transcend conventional state-centrism is the
need to ‘bring transnational actors back in’. We hope that this volume has con-
tributed to filling the lack of research on non-state actors per se as well as on the
intriguing and evolving relations between them and states. This requires a
theoretical framework that does not privilege the state unduly and avoids
a priori assumptions about who is the dominant and ‘regionalizing’ actor or
region-builder (cf. Hettne, Chaper 2; Hveem, Chapter 5; Neumann, Chapter 9;
Jessop, Chapter 10; Bøås, Marchand and Shaw, Chapter 11). For those theories
emphasizing the importance of non-state actors, a ‘regionalizing actor’ must be
understood in a nuanced sense. It can refer both to comprehensive collectivities
(such as states, markets and civil societies) but also to more limited networks
and coalitions, or even individual actors, for instance cross-border traders,
‘survivors’, political leaders or ‘plunderers’ (Bøås, Marchand and Shaw, Chapter 11;
Söderbaum, 2002; Grant and Söderbaum, 2003; Söderbaum and Taylor,
2003). An actor is ‘regional’ when he/she takes part – consciously or uncon-
sciously – in activities on a regionally defined arena. However, as already
indicated above, activities and actors on different ‘levels’ – from local to global –
are typically related to one another. In fact, most actors operate simultaneously
on more than one level (global, regional, etc.). Mittelman (1999: 25) is correct
in that ‘political and economic units are fully capable of walking on two legs’.
222 Conclusion: What Futures for New Regionalism?

Civil societies are generally neglected in the description and explanation of


new regionalism. This is an important gap, which receives too little systematic
analysis, unfortunately also in this volume (for an exception see Söderbaum,
2002). Similarly, even if the external environment and globalization are
often readily accounted for, extra-regional actors themselves are also generally
weakly described and conceptualized in the study of regionalism (again, and
unhappily, this volume included). This is somewhat surprising given the
considerable attention that ‘external’ actors, such as foreign powers, donors,
IFIs, NGOs, TNCs and so on, receive in the study of national and local trans-
formation processes, especially in the South.
In ‘Making Civil Societies from the Outside’, Howell (2000: 8–9, 10) draws
attention to the weakness of conceptualizing various actors in terms of the
conventional triangle of states, civil societies and markets, as outlined in the
introductory first chapter:

The imagery of a holy trinity, where state, civil society and market pose
as distinct, autonomous actors . . . embodies a normative position of how
the world should be rather than an accurate depiction of how it actually
works. . . . The triadic unity not only masks the potential contradictions
between the state, civil society and market but also hides from the view
the role of international donor agencies. More accurate would be the
image of a square rather than a triad. The absence of donors in this con-
ceptualization creates the illusion that donors are neutral in the relations
that unfold amongst the other three actors.

So, even if it is both possible and fruitful to distinguish among various


types of actors, i.e. states, markets, civil societies and external actors, futures
analyses and advocates of new regionalism need to acknowledge that these
actors rarely act autonomously. It is thus not so much a question about
state-regionalism versus non-state-regionalism (regionalization). On the
contrary, state, market, civil society and external actors often come together
in a variety of mixed-actor collectivities, networks and modes of regional
governance (Hveem, Chapter 5; Bøås, Marchand and Shaw, Chapter 11;
Payne, 2000; Söderbaum, 2002; Grant and Söderbaum, 2003). The recognition
of a range of mixed-actor coalitions makes it possible to understand how
actors are related to one another in patterns of inclusion and exclusion, i.e.
patterns that often cut across conventional ‘actor-belonging’.

New regionalism and (post-)disciplinarity

Definitions of and discourses around new regionalism impact on several


established disciplinary and inter-disciplinary fields of both analysis and
policy. But even relatively new and innovative fields like development, global,
new/human security studies can learn from insights drawn from new
Fredrik Söderbaum and Timothy M. Shaw 223

regionalism. In fact, at the start of the new millennium, there are very few
relationships or policies, let alone ‘disciplines’, that are not impacted by a
diversity of regional level forces. Regionalism, both old and new, is likely to
continue to expand as a field of research into the second decade of the
twenty-first century; hence the timelines of this collection.
For established disciplines there are some implications that follow directly
from this volume. First, for political science, new regionalism points beyond
state-centrism and the prevailing focus on formal organizations/institutions
towards a wider perspective which also recognizes the intriguing relation-
ship between formal/informal and state/non-state regionalisms. Second, in
terms of orthodox international relations, new regionalism points beyond
‘state’ security and formal inter-state conflict and cooperation to a variety of
definitions, interests, and not least a wide variety of regionalizing actors and
security referents. Third, the economics of new regionalism suggests going
beyond customs union theory and the infamous trade creation/diversion
dichotomy, in favour of the overlooked relationship between formal and
informal markets and the close relationship between global/regional/
national level economic forces, as well as the fact that non-economic
dimensions (political, socio-culture and security) interact with economic
variables (and therefore ought to be endogenous rather than exogenous vari-
ables in economic modelling).
Moreover, new regionalism serves to reinforce the imperative of innova-
tive yet rigorous conceptualization and investigation for a set of emerging
more inter- and post-disciplinary fields, such as global/human develop-
ment/security and IPE. Such innovativeness is further exemplified below
through comparative cases of new forms of regional capitalism, regional
conflict and peace-building, ecology and so forth.
The juxtaposition of new regionalism with insights drawn from compara-
tive (regional) political economy by Mukherjee Reed and Kundu (2000) and
Cox (1999) holds considerable promise when informed by a triangular con-
ceptual framework of civil societies as well as states and companies, along
with informal as well as formal sectors. In particular, these scholars identify
differences in the organization of capitalisms in different regions, whether the
latter are formally organized or not into intergovernmental institutions. The
former categorize a trio of regional capitalisms into Anglo-American ‘liberal’
(or hyper-liberal), European ‘corporatist’ and East Asian ‘developmentalist’
varieties (Mukerjee Reed and Kundu, 2000: 129–33). The latter adds less
familiar but no less telling varieties of state–corporate–civil society relations
from Eastern Europe and Africa: state breakdown and predatory capitalism
and civil society versus the state, respectively (Cox, 1999: 21–5).
Furthermore, new regionalism can be informed by economic, ecological
and/or ethnic relations as well as cultural and informal. The first of these may
be the most familiar in the regionalist literature, yet it can be micro-level
rather than macro-level. Likewise, ecological bases may stretch from the
224 Conclusion: What Futures for New Regionalism?

macro-levels (ocean rims like Atlantic, Indian and Pacific) to meso- or


micro-levels (the Mediterranean, Baltics, Amazon, Danube, Ganges,
Mekong, Nile, Rhine or Zambezi). And ethnic communities can span just
one or two borders to many given historical and continuing global migra-
tions and diasporas.
New regionalism and security and peace studies also cross-fertilize. Despite
some alternative approaches and cases in the novel ‘new’ or ‘human’ security
genre, state-centric notions of security continue to dominate traditional
international relations. In one attempt to ‘bridge’ such a divide, Adler and
Barnett (1998: 31) build upon Deutsch’s notion of a pluralistic security
community as ‘a transnational region comprised of sovereign states whose
people maintain dependable expectations of peaceful change’. They argue
that a social identity based on common values, norms, and symbols
provides the basis of a security community of states. However, although this
attempt undoubtedly contributes to deeper understandings of the instiga-
tion and consolidation of security communities, it tends at the same time to
reinforce several assumptions that are too closely associated with the old
regionalism for being easily accepted. Just like for Deutsch, Adler and
Barnett’s notion of security community starts and ends with the state
system. It favours security between states, and its main concern is negative
peace. In consequence it fails therefore to transcend statism as well as recog-
nize the importance and close relationship between human security and
development.
New regionalism can be compatible, then, with notions of ‘human’ security/
development in which a range of developmental concerns are privileged,
not just ‘national’ or ‘regime’ security (Grant and Söderbaum, 2003; Hentz
and Bøås, 2003). Meanwhile, in contrast to Adler and Barnett’s rather con-
ventional notion of security, there is a need to continue to raise the funda-
mental questions, whose region?, whose regionalism? and whose security/
development? (cf. Neumann, Chapter 9). The imperative of such redefini-
tion for the new millennium becomes ever more apparent when ‘new wars’
and new forms of regional conflict are taken into account, such as the myriad
forms of confrontation and violence in the former Yugoslavia, Central Asia,
the Great Lakes Region, West Africa, etc.
By extending his pioneering work on warlords in Africa as responses to
structural adjustment, Reno (2000) challenges orthodox notions of peace
and conflict. The argument is that weak states come to need private security
companies to defend them even if such regimes offer no effective domestic
administration or human security let alone human development. The ‘new’
political economy of violence genre suggests that the production and trans-
portation of valuable minerals like diamonds and gold and now coltan
across African and other borders is hardly new, no matter how much the
end of bipolarity has made such income imperative for both basic human
needs and continued supply of materiel for warfare. Unhappily, to date,
Fredrik Söderbaum and Timothy M. Shaw 225

most malign effects of and motives for regionalization have been over-
looked in both theory and practice, which is at least partly due to an unfor-
tunate legacy of interrelated Eurocentric preoccupations and idealist
assumptions. In many regards this volume has been a counterweight against
overly positive and idealistic views about existing regionalism.
This brings our attention to the fact that informal/illegal regionalisms also
impact on the prospects for regional development, both positively and nega-
tively. The former thrives in areas of the world with many borders and
weak states and may constitute a rather primitive or embryonic form of
regionalization. Illegal cross-border trade may lead to regional inter-state
responses, but it can also reinforce long-established regional patterns and
routes (cf. Grant and Söderbaum, 2003).
In this penultimate section, we suggest alternative futures for new regional-
ism at the start of the twenty-first century. We have already pointed to the
likelihood of a further proliferation of a variety of micro- to macro-level
regionalisms, in part because of a proliferation of new, small, weak states,
especially in Central Europe and Central Asia. Similarly, we expect that the
expansion of several leading macro-regions will lead to dilution and
renewed emphasis on meso- and micro-regionalism. Likewise, we anticipate
further regional-level conflicts eliciting a range of regional-level responses,
from peace-keeping/peace-building to confidence-building and tracks two/
three. And we expect the tension between globalization and regionalism to
continue: the latter as both facilitation and resistance. This diversity and
pluralism demonstrate that the ‘new regionalism’ is likely to be a more last-
ing phenomenon than the old regionalism; that the regional factor contains
its own structural dynamics and that it is ‘here to stay’. But the pluralism
also demonstrates that what is ‘regional’ is more elusive, and at least to
some extent a moving target.
As reflected in this collection, since the start of the 1990s, studies of new
regionalism have achieved a degree of momentum and recognition that
begins to make them a field in their own right. But it is important to once
again underline that such an embryonic area cannot be divorced from
related innovations such as globalization, human development/security,
and so forth. We anticipate further developments and debates, reflections
and refinements in the future. And we would hope that such welcome
evolution would lead to at least a second edition of this state-of-the-field
collection.
Internet Resources

ACU www.acu.ac.uk
AfDB www.afdb.org
AGOA www.agoa.gov
APEC www.apecsec.org.sg; www.pecc.net
Arab League www.arabji.com/ArabGovt/ArabLeague.htm
ASEAN www.aseansec.org
CAN www.comunidadandina.org
CARICOM www.caricom.org
CBI/RIFF www.afdb.org/cbi
CEPAL www.cepal.org
CIS www.cis.int
COMESA www.comesa.int
Commonwealth www.thecommonwealth.org
Commonwealth Foundation www.commonwealthfoundation.org
Commonwealth Games www.commonwealthgames.com
CSGR www.csgr.org
ECA www.uneca.org
ECLAC www.eclac.cl
ECOWAS www.ecowas.int
ESCAP www.unescap.org
ESCWA www.ecswa.org
EU www.europa.eu.int
Foreign Policy www.foreignpolicy.com (links/regional sources)
FTAA www.ftaa-alca.org/alca_e.asp
IADB www.iadb.org
IFG www.ifg.org
IGAD www.igad.org
LAIA www.aladi.org
LATN www.latn.org.ar/
Mercosur www.demon.uk/itamaraty/msul.html
www.dpr.mre.gov.br/dpg/merc00-i.htm
NAFTA www.dallasfed.org/fedhome.html
NAFTA Agreement the-tech.mit.edu/bulletins/nafta.html
NAFTA Secretariat www.nafta-sec-alena.org/english/index.htm
NATO www.nato.int
NEPAD www.nepad.org
NRA home-page www.padrigu.gu.se/presentationer/
soderbaum_reg.html
OAS www.oas.org
OAU/AU www.africa-union.org
OECD www.oecd.org
OECS www.oecs.org
One World Net www.oneworld.net
PanAsia www.panasia.org.sg

226
Internet Resources 227

SAARC www.saarc.com/; www.south-asia.com/saarc


SADC www.sadc.int
SAPSN aidc.org.za/sapsn
TWN www.twnside.org.sg
UEMOA www.uemoa.int
UNECE www.unece.org
UNU/CRIS www.unu.cris.edu
WTO www.wto.org
A Guide to Further Reading
on New Regionalism
Fredrik Söderbaum

This guide to further reading seeks to assist in navigating through the jungle of recent
literature on new regionalism. The emphasis is placed on books dealing with the new
regionalism in a theoretical perspective, implying that works specifically focusing on
particular regions are not included. The books are listed in alphabetical order of
author (unless there are several volumes that stem from the same research project).

Adler, Emanuel and Michael Barnett (eds) (1998), Security Communities. Cambridge:
Cambridge University Press (462 pages).

By investigating the relationship between international community and the pos-


sibility for peaceful charge, this comprehensive volume revisits Karl Deutsch’s
famous concept of ‘security communities’. Leading scholars examine security
communities in various historical and regional contexts: in places where they
exist, where they are emerging, and where they are hardly detectable. The volume
builds on constructivist theory and the authors argue that security policies are
profoundly shaped by community nations, and that those states dwelling within
an international community can develop a peaceful disposition.

Bøås, Morten, Marianne H. Marchand and Timothy M. Shaw (eds) (2004), New
Regions and New Regionalisms. Basingstoke: Palgrave (forthcoming).

The authors argue that what differentiates the ‘new regionalisms approach’ from
other approaches is the deliberate focus on how nexuses of globalization and
regionalization have created a whole range of diversified patterns of interactions
and responses at the local, national and regional level. Against this background it
is important that the processes of global restructuring to which these terms apply
are addressed in the plural instead of their singular form in order to reflect their
multidimensionality. These terms should also not be pinned onto one specific
type of actor (most often the state), but should rather reflect the activities of and
interactions between states, firms and community (groups) as well as NGOs and
new social movements. From this perspective the various contributions reflect on
regionalist processes in the Americas, Southeast Asia and Southern Africa.

Breslin, Shaun, Christopher W. Hughes, Nicola Philips and Ben Rosamond (eds)
(2002), New Regionalisms in the Global Political Economy. Theories and Cases. London:
Routledge/Warwick Studies in Globalisation (257 pages).

This book provides an innovative integration of theoretical considerations with


sophisticated and detailed analyses of a wide range of case studies from across the
world – from Africa, Asia, Latin America, Europe and the South Pacific. The gen-
eral theme of the book, that regionalism and regionalization must be examined in

228
A Guide to Further Reading on New Regionalism 229

the context of globalization and the changing nature of the global political
economy, serves to knit the chapters together. As a whole the volume provides a
comprehensive base for the comparative study of the new regionalism.

Buzan, Barry and Ole Wæver (2003) Regions and Powers. The Structure of International
Security. Cambridge: Cambridge University Press.

This book explores the idea that, since decolonization, regional patterns of secur-
ity have become more prominent in international politics. It examines the inter-
play both among the global powers, and between them and all of the security
regions that make up the contemporary international system. Individual chapters
cover Africa, the Balkans, CIS Europe, East Asia, EU Europe, the Middle East, North
America, South America and South Asia. The main focus is on the post-Cold War
period, and the theoretical framework is explicity comparative. These portraits
give a clear and detailed answer to the much discussed question about the nature
of the ‘new world security order’ that followed the ending of the Cold War.

Coleman, William D. and Geoffrey R.D. Underhill (eds) (1998), Regionalism and
Global Economic Integration. Europe, Asia and the Americas. London: Routledge
(253 pages).

This interdisciplinary volume looks at the relationships between national policy


arrangements, regional integration and global economic integration. It covers
regional patterns in Europe, Asia and the Americas, and case studies of monetary,
financial, welfare, industrial policy and public governmental regulation. The
volume draws attention to the diversity of regional patterns in the world economy
and the continuing importance of national regulatory structures, yet it also points
to the common pressures of globalization felt by all.

Fawcett, Louise and Andrew Hurrell (eds) (1995), Regionalism in World Politics.
Regional Organization and International Order. Oxford: Oxford University Press
(342 pages).

This book explores the theory and history of regionalization and the balance
between globalization and regionalism/regionalization. It also takes a critical look
at recent trends towards the new regionalism in specific regions – i.e. Pacific-Asia,
the Americas, Europe and the Middle East – assessing their origins, present and
future prospects and place in the evolving international order.

Gamble, Andrew and Anthony Payne (eds) (1996), Regionalism and World Order.
Basingstoke: Macmillan (282 pages).
Hook, Glenn and Ian Kearns (eds) (1999), Subregionalism and World Order. Basingstoke:
Macmillan (268 pages).
Breslin, Shaun and Glenn D. Hook (eds) (2002), Microregionalism and World Order.
Basingstoke: Palgrave (264 pages).

This trilogy of books stemming from the Political Economy Research Centre
(PERC) at the University of Sheffield focuses on states-led regionalist projects at
different levels (regionalism, sub-regionalism, micro-regionalism), through the
prism of the ‘New International Political Economy’, or what lately has been
230 A Guide to Further Reading on New Regionalism

referred to as the World Order Approach (WOA). The point of departure is that
globalization has provided a new context for the new regionalism. However, an
important result is that regionalism does not conflict with the trend towards
greater globalization, although the potential is there for it do so. By illustrating the
complex relationship amongst the political, economic and social dimensions of
various forms of regionalism all over the world, the three books advance the theor-
etical debate on regionalism at the same time as they provide new empirical
insights.

Grugel, Jean and Wil Hout (eds) (1999), Regionalism Across the North–South Divide.
State Strategies and Globalization. London: Routledge (216 pages).

This volume analyzes the role of the semi-periphery and vital countries in the
semi-periphery in creating the new regionalism that is emerging in the 1990s. The
text examines their responses and reactions to global change, and the place of
regionalism within their foreign economic policy. Case studies cover Brazil and
Mercosur, Chile, South East Asia, China, South Africa, the Maghreb, Turkey and
Australia. These are framed by introductory chapters focusing on the creation of
the semi-periphery in the context of globalization and regionalism, and the
underlying theoretical perspectives and trends in approaching the subject.

Hentz, James J. and Morten Bøås (eds) (2003), New and Critical Security and Regional-
ism: Beyond the Nation State. Aldershot: Ashgate (264 pages).

This book challenges the assumption of hard-shelled Weberian states in traditional


security studies and expounds on the ‘security dilemmas’ faced by developing coun-
tries. It uses a regional prism with case studies from Asia-Pacific, Central Asia, Cen-
tral Africa, East Asia, Latin America, South Asia, Southern Africa and West Africa. It
also, however, confronts the claim made by the traditional security studies school
that expanding the discipline destroys its intellectual coherence. It offers theoretical
challenges to the field of security studies broadly defined by exploring through the
lens of human security the importance of new security issues such as: migration,
economic underdevelopment, weak states, HIV/AIDS, and environmental security.

Hettne, Björn, Andras Inotai and Osvaldo Sunkel (eds) (1999), Globalism and the New
Regionalism. Basingstoke: Macmillan (270 pages).
Hettne, Björn, Andras Inotai and Osvaldo Sunkel (eds) (2000), National Perspectives on
the New Regionalism in the North. Basingstoke: Macmillan (284 pages).
Hettne, Björn, Andras Inotai and Osvaldo Sunkel (eds) (2000), National Perspectives on
the New Regionalism in the South. Basingstoke: Macmillan (317 pages).
Hettne, Björn, Andras Inotai and Osvaldo Sunkel (eds) (2000), The New Regionalism
and the Future of Security and Development. Basingstoke: Macmillan (313 pages).
Hettne, Björn, Andras Inotai and Osvaldo Sunkel (eds) (2001), Comparing Regional-
isms: Implications for Global Development. Basingstoke: Palgrave (292 pages).

This mini-series investigates and explores the pluralism and multidimensionality


of the new regionalism in the post-Cold War era, focusing on three major themes
of regionalism: the global context, the dynamics of regionalization and the
implications for peace and development. The first volume deals with the complex
relationship between regionalization and globalization, emphasizing that, although
A Guide to Further Reading on New Regionalism 231

both processes form an integral part of the current transformation of the global
system, regionalization has a stronger element of political reaction to the basically
market-driven globalization process. The second and third volumes illustrate and
analyse various national perspectives on regionalism in the North and in the South,
respectively. The fourth volume focuses on security and development implications
of the new regionalism. The fifth has a comparative orientation with the purpose
of improving the theoretical framework and providing a foundation for further
research on the role of the ‘regional’ in the current global transformation.

Keating, Michael and John Loughlin (eds) (1997), The Political Economy of Regionalism.
London: Frank Cass (504 pages).

This book examines the effects of economic and political restructuring on micro-
regions in Europe and North America. The main theses are: international
economic restructuring and its impact on micro-regions; political realignments at
the regional level; questions of territorial identity and their connection with class,
gender and neighbourhood identity; policy choices and policy conflicts in micro-
regional development.

Lake, David A. and Patrick M. Morgan (eds) (1997), Regional Orders. Building Security in
a New World. University Park, PA: Pennsylvania State University Press (406 pages).

The point of departure of this book is the fact that, after the bipolar Cold War
struggle, states in differing regions are taking their security affairs more into their
own hands. This trend towards new ‘regional orders’ is the subject of the book.
The purpose is both to document the emergence and strengthening of these new
regional arrangements and to show how international relations theory needs to be
modified to take adequate account of the salience of regional orders in the world
today. The book presents theories of regional order that both generalize about
regions and predict different patterns of conflict and cooperation.

Mansfield, Edward D. and Helen V. Milner (eds) (1997), The Political Economy of
Regionalism. New York: Colombia University Press (274 pages).

This volume deals with regionalism in a political economy perspective. Leading


scholars in the field address key questions such as: Why are regional arrangements
formed? Under which conditions are these arrangements deepened? and Why do
they take on different institutional forms? The volume bears on a number of
theoretical debates, particularly the advantages and limitations of neorealist and
neoliberal institutitional theories, new trade theories and the new institutional-
ism. The empirical cases are from Europe, Asia and North America.

Mattli, Walter (1999), The Logic of Regional Integration. Europe and Beyond. Cambridge:
Cambridge University Press (205 pages).

This books reveals that regional integration is not a new phenomenon. Mattli
claims to provide the first analysis of regional integration across time and across
regions. The book examines regional projects in nineteenth and twentieth-century
Europe, but also in Latin America, North America and Asia since the 1950s. The
key questions are why some integration schemes succeed and others fail, what
232 A Guide to Further Reading on New Regionalism

forces drive the process of regional integration, and under what circumstances
outsider countries seek to join. The author uses a political economy approach,
which stresses the importance of both market forces and institutional factors.

Niemann, Michael (2000), A Spatial Approach to Regionalisms in the Global Economy.


Basingstoke: Macmillan (185 pages).

This book challenges the traditional manner in which regionalization has been
approached and suggests that the failure to understand the phenomenon is the
result of the modernist relegation of space to the margins of analysis. Niemann
proposes an alternative approach that views space as a social construct. From this
perspective, regionalization represents the construction of new layers of social
space in a search for an institutional fix to the challenges of globalization. This
model is applied to Southern Africa, Central America and South America. Finally,
Niemann proposes that regions may also serve as spaces for counterhegemonic
mobilization which takes advantage of the weakening of the state.

Perkmann, Markus and Ngai-Ling Sum (eds) (2002), Globalization, Regionalization and
Cross-Border Regions. Basingstoke: Palgrave (266 pages).

Cross-border micro-regions are newly emerging social spaces stretching across


national borders. Globalization makes national borders more permeable and leads
to a rearrangement of economic and political interactions. This is particularly
pronounced within supra-regional blocs featuring specific internal border regimes.
The ensuing opportunities are increasingly seized to create border-spanning
discourses and institutions. This volume develops a post-disciplinary approach to
cross-borderization, emphasizing the dynamics of ‘rescaling’ and the politics of
scale, the discursive mobilization of identities and the building of cross-border
governance. It includes empirical cases from cross-border micro-regions in Europe,
America, East Asia and Africa.

Schulz, Michael, Fredrik Söderbaum and Joakim Öjendal (eds) (2001), Regionalization
in a Globalizing World. A Comparative Perspective on Forms, Actors and Processes.
London: Zed Books (304 pages).

This edited volume uses an eclectic and multidisciplinary version of the New
Regionalism Approach (NRA) and examines eleven macro-regions in a comparative
perspective. It concentrates on core questions, such as: (i) What constitutes a
region? (ii) How is the historical process of region-formation unfolding? (iii) What
are the main actors and motives of regionalization? (iv) What forms of regional
awareness and institutionalization are emerging? and (v) What are the future pro-
spects of the new regionalism? Focusing on all the major regions in the world, this
book shows that regionalization is an unevenly developing, highly heterogeneous
and multidimensional phenomenon.

Telò, Mario (ed.) (2001), European Union and New Regionalism. Regional Actors and
Global Governance in a Post-Hegemonic Era. Aldershot: Ashgate (330 pages).

This edited collection takes as its point of departure the fact that globalization and
new regionalism are not only economic but also political processes. Its particular
A Guide to Further Reading on New Regionalism 233

focus is the comparative analysis of regional organizations and their interrelations


with the globalized economy and world politics in the post-Cold War era. The
book offers on the one hand a theoretical framework for new regionalism and a
comparative analysis of other regional organizations, bearing in mind the Euro-
pean experience. On the other hand, it shows the characteristics of the European
Union as a growing global player and also its proactive relationship with other
regional organizations.
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Index

ACP 41, 130, 218 Caribbean 108, 205


see also EU Central Asia 146, 225
actors 14, 15, 16, 161, 201 Central Europe 25, 183, 188, 225
acts 162 China 35, 56, 57, 67, 98, 133, 146, 147,
Africa 26, 51, 59, 68, 71, 110, 118, 126, 179, 181, 183, 188, 189, 195, 230
129, 130, 131, 136, 152, 156, 157, civil society 14, 36, 37, 198, 222, 223
181, 198, 205, 213, 228, 229, 232 civilizations 43, 44
see also Southern Africa, West Africa Cold War vii, 4, 23, 54, 63, 64, 65, 66,
agency 11, 12, 15, 89 67, 75, 79, 85, 109, 140, 145, 146,
see also structure 148, 150, 160, 171, 172, 176, 188,
al Qaeda 64, 66, 147 191, 197, 198, 220, 229, 231
see also September 11 competition 134
anti-Cold War see Cold War constructivist 7, 9, 10, 11, 16
anti-globalization vii, 39 English School 16
see also globalization, Seattle see also post-structuralism
conference corporate regionalization 87
APEC 40, 45, 56, 58, 96, 110, 113, corporations see MNEs; TNCs
153, 186, 197, 217 corridors 198, 219
Argentina 100, 104, 107 see also triangles
ASEAN 1, 40, 79, 88, 110, 111, 125, cosmopolitan 36, 37, 41
130, 131, 132, 146, 159, 186, 191, Cox, Robert 6, 9, 17, 45, 46, 47, 48,
197, 219 50, 216, 237–8
ASEM 40–2, 97, 186, 217 critical (approach/theory) 7, 9, 10,
Asia 35, 68, 71, 78, 79, 92, 93, 94, 12, 46, 47, 230
107, 110, 126, 130, 184, 193, see also critical IPE
213, 219, 228, 231 critical IPE 15, 216
cross-border investment (CBI) 104,
Baltic 25, 172, 173, 174, 175, 176, 127, 128
189, 195 cross-border regions 12, 19, 179–95, 232
barriers (to trade) 102, 117, 122,
126, 128 Denmark 162–71
see also non-tariff barriers (NTBs) see also Nordic; Scandinavia
Bhagwati, Jagdish 118, 235 Deutsch, Karl 163, 228, 238
Britain 56, 60, 146, 165, 171 development 117–38, 224, 225
Buzan, Barry 2, 7, 15, 16, 19, 140–59, and regionalism 117–38, 224
164–6, 236 Doha 132
see also Uruguay Round; WTO
Canada 54, 99, 106, 108, 110, 114, DRC 206
152, 155, 187
see also NAFTA East Asia 40, 51, 56, 60, 100, 104, 107,
capital 101, 135 118, 130, 132, 133, 135, 146, 156,
capitalism 17, 52, 59, 67, 80, 179, 157, 180, 195, 232
180, 223 Eastern Europe 99, 103, 104, 112, 183, 188

252
Index 253

ecology 189, 223 hegemony 85–91, 106, 107


see also environment see also US
ECOWAS 1, 205, 206
see also West Africa ICGG 35, 82
endogenous 12, 26, 27, 213 see also global governance
see also exogenous identity 89
environment 149, 155–6 IFIs 24, 45, 53, 81, 222
see also ecology see also World Bank
EPZ 184, 219 illegal 225
see also triangles India 35, 38, 86, 133, 148
ethnicity 130, 206 see also SAARC; South Asia
EU 29, 40, 45, 51, 54, 56, 68, 61, 77, 85, informal (sector) 15, 209, 225
89, 92, 93, 97, 98, 99, 107, 109, 110, see also formal
113, 114, 118–19, 123, 130, 145, inside-out approach 162–76
153, 167, 172, 186, 197, 211–13, 233 integration 5
Europe 24, 26, 27, 35, 37, 51, 52, 53, 57, see also regional integration
58, 68, 72, 73, 78, 92, 100, 107, 110, interdisciplinary 24
119, 143, 148, 149, 160, 173, 180, 183, international political economy
184, 186, 190, 195, 212–13, 231, 232 26, 27, 45–62, 199, 213, 216,
European integration 27 220, 229
exogenous 12, 26, 29, 134 new international political
see also endogenous economy 45–8, 229
international relations viii, 27, 119,
FDI 102, 103, 104, 122, 128, 129, 162, 202, 220, 223
132, 133, 200 interregionalism 40, 120, 131, 217
Finland 164, 167, 168, 170, 175
see also Northern Europe; Nordic Japan 35, 52, 54, 56, 57, 59, 73, 99,
formal (sector) 15, 28–9, 209 106, 109, 113, 148
see also informal
France 56, 60 knowledge-based economy 180
free trade areas (FTAs) 83, 87 Kosovo 36
FTAA 110
futures 20, 211–25 Latin America 53, 54, 59, 69, 71, 100,
104, 107, 112, 118, 126, 130, 146,
G7/G8 19, 68, 82, 98, 135, 218 152, 213, 231
GATT 99, 102, 105, 108, 109, 110, 115 see also Mexico, US
see also WTO
Germany 56, 146, 165, 169 Maastricht Treaty 54–6, 77
global governance vii, 18, 27, 35, 37, see also EU
41, 62, 81–2, 179 macro-region 6, 12, 25, 179, 186, 219
humane 36–7 see also meso-region; micro-region
ICGG 35, 82 markets 117, 128, 133
see also governance Mediterranean 25, 144, 156,
globalization vii, 4, 12, 13, 20, 24, 27, 176, 206
29, 30, 33, 45, 50, 71, 103–5, 106, Mercosur 1, 40, 97, 100, 110, 112, 114,
115, 179, 186, 215, 225, 230, 231 130, 159, 186, 197, 218
of trade 103–5 see also Argentina; Latin America
governance 30, 36, 61, 62, 81, 91, 93, meso-region 6, 179, 186
192, 193–4 Mexico 92, 107, 114, 152, 181, 219
see also global governance see also Latin America; US
254 Index

micro-region 6, 12, 19, 25, 26, 51, open regionalism 52


179, 186, 219 outside-in approach 162–77
see also macro-region; meso-region
Middle East 66, 69, 77, 110, 130, 133, Poland 173, 174
136, 140, 144, 147, 151, 156, 229 Polanyi, Karl 13, 14, 15, 26, 31, 32, 33,
MNEs 102, 200, 222 37, 39, 60, 93, 248
see also TNCs policy regime 192, 194
multilateralism 12, 13, 18, 24, 25, 32, political economy 19, 26, 84, 100,
34, 35, 37, 38, 71, 99, 100, 105, 106, 101–14, 179, 208, 224, 228, 231
107, 108, 109, 114, 115, 119, 120, see also international political
133, 138, 215, 216, 217 economy
multiregionalism 37, 41 political science vii, 84, 208, 223
Murphy, Craig N. 45, 46, 246 post-Cold War 67–80, 140–59, 211, 233
see also Cold War
NAFTA 1, 40, 45, 53, 58, 69, 81, 89, post-structural (analysis) 7, 12, 16,
108, 111, 112, 113, 132, 153, 159, 19, 27, 160
182, 192, 197, 219 post-Westphalia see Westphalia
see also Canada; Mexico; US protectionism 107
NATO 36, 67, 75, 85, 97, 169
neofunctionalism 4, 26, 27, 59, 89, 202 ‘Quad’ 99, 106
neoliberalism 34 see also Canada; EU; GATT; Japan;
NEPAD 68 WTO
new regionalism 1–20, 22–41, 61,
117–38, 198, 211–25, 228 rationalist 10, 11
defined 1–2 ‘real’ region 24, 28
futures for 211–25 realism 27, 34
new regionalism approach (NRA) 12, see also international relations
16–17, 22–41, 117–38, 211–25 reflectivist 9, 10, 11
see also old regionalism reforms 118
NRA see new regionalism region 6–8, 16, 24, 28, 41, 59, 159
new security 19, 150, 222, 230 regional community 29, 203, 217
NGOs 14, 20, 164, 198, 201, 222, 228 regional complex 28, 203
non-state actors 24 regional cooperation 8
non-tariff barriers (NTBs) 117, 122, see also regional integration
126, 127, 128 regional integration 8, 18, 117–38
see also barriers regional integration arrangements
Nordic 140, 162, 163, 174, 176, 188, (RIAs) 18, 117–38
195, 219 second generation 124–6
see also Northern Europe; Scandinavia regional security complex 7, 19, 21,
North 214, 231 140–59
Northern Europe 160, 162, 163, 166, regional society 28, 203
176, 177 regional space 28, 218
see also Nordic; Scandinavia regionalism vii, 1–20, 22–41, 83, 99,
North–North 99, 113 110–15, 117, 118, 228, 233
North–South 94, 99, 121, 230 closed 118
Norway 162–76 futures of 39–41, 211–25
open 118
OECD 19, 102, 103, 111, 135, 180 waves 3
old regionalism 23, 27 see also new regionalism
see also new regionalism regionalization 7, 8, 202–4
Index 255

region-building 11, 19, 160–77, 218 structure 89


‘regionness’ 27–9 see also agency
Ruggie, John 32, 100, 107, 248 Sweden 162–75
Russia 35, 45, 56, 165, 168, 170, see also Nordic; Northern Europe;
173, 189 Scandinavia

SAARC 86, 110, 131, 159 theory vii, 8–12, 212–15


see also South Asia see also international political
SADC 1, 86, 88, 110, 153, 159, 197, 219 economy; international relations;
see also Southern Africa post-structural
scale 179 TNCs 200
Scandinavia 162, 164, 195 see also MNEs
see also Nordic; Northern Europe trade 25, 99, 100, 101, 110, 118
Seattle conference 109 political economy of 101–3
see also WTO transnational 93
Second World War 39, 43, 63 trans-regionalism 25, 185, 221
security 141, 151, 224, 225 triangles 184, 188, 189, 191, 198, 219
see also regional security complex see also EPZ
security community 163, 228
September 11 35, 38, 43, 44, 63, UN 34, 36, 65, 66, 74, 75, 76,
64, 69, 70, 79, 82, 109, 145, 79, 131
147, 148 unilateralism 71, 119
see also al Qaeda unipolar 106
social constructivism 27 UNU/WIDER vii, 22–3, 31
social space 204–5 Uruguay Round 105, 109, 113, 118
South 213, 231 see also GATT; WTO
South Africa 23, 129, 130, 133, 213, US 17, 35, 44, 48, 49, 51, 53, 56, 58,
230, 231 59, 63, 64, 69, 70, 73, 79, 86, 98,
see also SADC; Southern Africa 99, 106, 108, 109, 113, 114, 145,
South America see Latin America 147, 148, 149, 186
South Asia 59, 132, 133, 140, 144, 146,
148, 156, 205, 229, 230 West Africa 204–6, 224
see also SAARC see also ECOWAS
Southeast Asia 25, 144, 146, 198, 228 Western Europe 3–4
see also ASEAN see also EU
Southern Africa 219, 228, 230, 231 Westphalia 30, 34, 35, 38, 40, 64, 68,
see also SADC, South Africa 74, 82, 119, 125, 216, 217
South–North 113 World Bank 53
South–South 121 see also IFIs
Soviet Union see Russia World Order 16, 17, 23, 37, 43–62,
statecentrism 14, 23 63–80, 230
see also realism WTO 39, 53, 81, 93, 94, 98, 99,
states 14, 15, 20, 65, 149, 192, 193 105, 106, 108, 112, 113, 115,
structural adjustment 129 119, 131, 192
see also neoliberalism see also Doha; GATT; Uruguay Round