Question

Discuss the impact of regional economic groupings

Answer 1

1. Governments’ wish to bind themselves to better policies, including democracy and to signal such bindings to domestic and foreign investors.

2. A desire to obtain more secure access to major markets.

3. The pressures of globalization, forcing firms and countries to seek efficiency through larger markets, increased competition, and access to foreign technologies and investment.

4. Governments’ desire to maintain sovereignty by pooling it with others in areas of economic management where most nation-states are too small to act alone.

5. A desire to jog the multilateral system into faster and deeper action in selected areas.

6. A desire to help neighboring countries stabilize and prosper