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Title: Integration theories and integration forms


1
Integration theories and integration forms
  • EU-integration knowledges
    Written by Endre Domonkos
  • 1st Semester, Academic Year 2010/2011

2
I. The genesis of integration theories I.
  • It was only in the last half-century that
    international integration became the subject of
    research by social scientists. Economics and
    political science really began to deal seriously
    with the question only after World War II.
  • The intensification of efforts at European
    integration, that many integration experiments
    and the groupings achieved (the EU, EFTA, NAFTA,
    ASEAN) gave an especially strong impetus to
    research.
  • Integration research is not without theoretical
    antecedents. The conceptual foundations of the
    theory of international economic integration can
    be traced all the way back to the classics (Adam
    Smith and David Ricardo).
  • Concrete theoretical and methodological
    interpretations of them, and the techniques of
    analyses employed are based mainly on
    neoclassical and welfare international economics,
    which examined the benefits gained from
    international trade.
  • Analysis of the international integration process
    became general in international economics and
    world economics only in the period after World
    War II was similar in the political science.
  • From the 1950s, customs union theories are
    regarded as the basis of the economics literature
    on international integration (they analyzed the
    advantages and disadvantages of customs union).
  • In the political science field neo-functionalism,
    federalism and the analyses relating to
    intergovernmentalism are recognized as the main
    theoretical currents with regard to attempts at
    European integration.

3
I. The genesis of integration theories II.
  • Despite the novelty of integration theory it
    must be remembered that the idea of European
    union and within this, for example, a United
    States of Europe was by no means new. From the
    16th century the idea of uniting Europe, and
    efforts aimed at this, had occupied the minds of
    many of the continents great thinkers (Erasmus
    of Rotterdam, Jan Amos Comenius, William Penn,
    François-Marie Voltaire, Charles-Louis de
    Secondat Montesquieu and Immanuel Kant).
  • Between the two world wars the Pan-European
    movement had a great influence on all kinds of
    political trends, and concrete proposals were put
    forward.
  • Richard Coudenhove-Kalergis book about
    Pan-Europa. Building a united Europe on federal
    structures.
  • Aristide Briand (French Foreign minister)
    Memorandum on the Organization of a Regime of
    European Federal Union.
  • In 1941 the so called Ventotene Declaration was
    formulated by Altiero Spinelli (For a free and
    united Europe).
  • The coherent theoretical basis and directions of
    integration, and within it, European integration,
    thus gradually took shape.
  • The integration attempts of recent decades drew
    the attention not only of economists and
    political scientists but also of academics in
    many other fields, and on this basis many
    theoretical trends and schools of integration
    theory emerged. The subject of integration
    involves legal, sociological, historical and
    cultural research. In connection with
    integration, European studies, as a new field
    of scholarship, is increasingly charactarized by
    a multidisciplinary approach (combining history,
    economics, law, sociology, political science and
    culture).

4
I. The genesis of integration theories III.
  • Integration is conceived as a complex process,
    which embraces the different fields of social
    life.
  • Nye for example, distinguishes between economic,
    political and social integration. Economic
    integration would constitute high trade social
    integration would include the unification of
    masses, special groups or elites political
    integration would encompass a wide array of
    phenomena, including more decisions on the
    international level, international bureaucracies,
    and attitudinal similarity among nations.
  • Despite the international and extensive research,
    it would be difficult to give a comprehensively
    valid and generally acceptable definition of
    international integration.
  • We can define integration as a state or as a
    process, as a fact or as an aim to be achieved.
  • From the most varied theoretical and political
    platforms integration is treated as an aim- or
    requirement-concept.
  • In general, integration theories focus on five
    important dimensions of the process.
  • - the content (or essence) of integration
    processes
  • - the organizational forms and institutions of
    integration
  • - regulation (policies) and governance of
    integration
  • - the advantages and disadvantages of
    integration (cost-benefit analysis)
  • and finally
  • - the problems of integration maturity
    (capacities or capabilities for integration).

5
II. Division of labour theories and
transactionalists I.
  • The content of integration can be approached from
    several directions.
  • Interpretation of the content of economic
    integration can perhaps best be linked to
    theories of the division of labour.
  • From the 1970s approaches from this aspect were
    particularly characteristics of the integration
    literature of the East European countries, which
    sought to deduce the phenomenon of integration
    from the evolution of the international division
    of labour.
  • According to the theory of the international
    division of labour, a precondition of integration
    is a certain intensity or quantitative
    densification of the international division of
    labour, which beyond a certain point results in a
    new quality.
  • Integration can be seen as an organized or
    institutionalized division of labour.
  • We can define integration as a process embracing
    various forms and areas of the international
    division of labour. Integration is a
    comprehensive form of international cooperation
    that extends to the whole re-production and the
    systems of international relations (trade, the
    flow of capital and labour, technical relations,
    macroregulation, etc.).
  • The national economy, as a basic macroeconomic
    unit for the production, distribution and the use
    of assets is a determinate system. The social
    re-production process today still consists
    basically in re-production of domestic products.
    The national economy provides the framework in
    which, through the system of economic forms, the
    proportions of re-production and equilibrium of
    economic activities are achieved.

6
II. Division of labour theories and
transactionalists II.
  • From this point of view, the national economy
    embodies the determinate complexity of social
    production.
  • International economic integration unites the
    national re-production processes and increases
    their reciprocal dependence (Tibor, Palánkai).
  • Thus internationally microintegration takes place
    within the framework of transnational
    cooperations and company relations. The
    macrointegration process can be defined through
    the various degrees of commercial and economic
    groupings.
  • Integration, then from the economic point of view
    can be defined as an intensive, lasting and
    long-term, organized and institutionalized
    division of labour embracing the whole
    re-production process.
  • The economic theories of integration emphasize
    that the international division of labour,
    through specialization and cooperation, is
    accompanied by an increase in efficiency.
  • According to division of labour theories,
    enhancement of efficiency and prosperity is the
    general, fundamental motivating factor in
    integration.
  • Political science concepts of integration have
    differing approaches with regard to its purpose
    and value.
  • According to many schools of political science,
    international integration assists in the handling
    and solving of conflicts, arguments, tensions and
    clashes of interest.

7
II. Division of labour theories and
transactionalists III.
  • Among the different schools, first have to
    mention transnationalism, which shares several
    common or similar aspects of interest and
    approach with division of labour theories of
    integration.
  • In dealing with conflicts and tensions, as the
    condition and basic objective of integration,
    transactionalism conceives integration in a very
    broad sense as the formation of security
    community.
  • The transactionalist or communication theories
    can be associated directly with the works of Karl
    Deutsch.
  • Thus, international integration is defined as
    being about the achievement of security within a
    region or among a group of states. The definition
    of security community was bound up with the
    conception of integration. Security communities
    were groups of people that had become
    integrated. Further, integration was defined as
    attainment, within a territory, or a sense of
    security community and of institutions and
    practices strong enough and widespread enough to
    assure a long-time, dependable expectation of
    peaceful change among its population (Deutsch,
    Karl).
  • The transactionalists, in many respects similarly
    to division of labour theories, also put great
    emphasis on intensity of relations and
    cooperation as the lever for building a security
    community and consequently for integration.
  • According to these, conflicts and rivalries (wars
    and disputes) can be attributed to divergences,
    differences, absence of similarity, which may be
    rooted in the economy (differences in levels of
    development and incomes) or culture (traditions,
    religion, etc.).
  • Thus integration is an economic and social
    rapprochement which in certain areas eliminated
    distances. The equalizing of levels of
    development therefore features as a criterion of
    integration.

8
III. Interdependence and integration I.
  • From the point of defining the content of
    integration we attach special importance to
    interdependence.
  • The development of mutual dependence is closely
    related to the development of the division of
    labour, particularly the international division
    of labour that has charactarized recent decades.
  • We can state that eventually a certain intensity
    of international cooperation leads to the
    internal development of interdependence and
    ultimately to its increase.
  • In a broader and more general approach,
    interdependence can be interpreted as a state or
    process when the position of agents becomes
    mutually dependent and their actions mutually
    determined.
  • Interdependence can be defined as a new quality
    of international relations, when as a result of
    the expansion of cooperation, at a certain point
    the position of countries changes significantly
    toward each other, and their policies and actions
    become mutually dependent.
  • Theorizing about interdependence started as long
    ago as the 1950s and 1960s, but in international
    relations interdependence became a core concept
    only during the 1970s.
  • Dependence means a state of being determined or
    significantly affected by external forces.
    Interdependence can be defined as means of mutual
    dependence.
  • Interdependence in world politics refers to
    situations charactarized by reciprocal effects
    among countries or among actors in different
    countries.

9
III. Interdependence and integration II.
  • These effects often result from international
    transactions flows of money, goods, people and
    messages across international boundaries.
  • The effects of transactions on interdependence
    will depend on the constraints, or costs,
    associated with them.
  • Where there are reciprocal, although not
    necessarily symmetrical, costly effects of
    transactions, there is interdependence.
  • Where transactions do not have significant
    costly effects, there is simply
    interconnectedness (Keohane and Nye).
  • To sum up, it can be stated that in this
    connection integration means that through
    interdependence the given countries development,
    equilibrium conditions, economic stability and
    performance are determined by their relations
    with their community partners.
  • The process becomes organized into regional
    institutions, but globally too is organized and
    served by an increasing number of institutions.
    The world economy is an independent organic
    system, which with the globalization of the last
    few decades can increasingly be seen as an
    integrating structure.
  • Integration, therefore, is a cooperation between
    the individual elements of a system in which the
    stability and internal equilibrium of the system
    is maintained, or even by means of which it is
    achieved.
  • Integration improves the performance and
    competitiveness of the group of countries and
    stabilizes their economy and their social and
    political relations. Interdependence is the most
    important feature of the content of integration.

10
IV. Basic form of integration I.
  • Integration can be implemented in the form of
    various commercial and economic groupings and
    intitutions.
  • These can be regional free trade blocs, which
    apply collective protectionism or discrimination
    againts outsiders, or various sorts of
    integration in which economic policies are
    integrated.
  • On the basis of the work by Béla Balassa,
    considered a classic of the literature on
    integration (Balassa 1961), the following main
    forms can be distinguished
  • 1. The free trade area. Within the area is
    liberalized by the reduction of customs tariffs
    and quotas, and with
  • outsiders every member country applies
    separate customs tariffs and quotas. To counter
    exploitation of
  • national differences in customs
    tariffs, certification of origin (rule of origin)
    is demanded. For certifying
  • the country of origin of goods,
    determination of local content is important.
  • 2. The customs union. Within the area foreign
    trade is liberalized, but with outsiders common
    customs tariffs
  • (but not necessarily quotas) and
    ultimately joint foreign trade policies are
    applied. To ensure that there are
  • no obstacles to competition, a common
    competition policy is essential. If the customs
    union is complete,
  • extending to every sector of the
    economy, then other common policies (like joint
    agricultural policy) may
  • also be required.
  • 3. The common market. This is more than a
    customs union, in that with-in area there is not
    only free
  • movement of goods and services but
    also a free flow of factors of production
    (capital and labour).

11
IV. Basic form of integration II.
  • The single market. This represents complete
    liberalization, internal market conditions,
    with the removal not just of customs tariffs and
    quantitative restrictions but of all restrictions
    of a non-tariffs nature. This was implemented
    in the EU in 1992, and now extends to the
    elimination of physical barriers (border
    formalities), technical ones (standards,
    specifications, etc.) and fiscal ones (tax
    harmonization). The unified market presupposes
    wideranging harmonization of economic regulations
    (laws) and economic policies.
  • In economic union, not only has market
    integration taken place, but integration of
    economic policies is also implemented, in the
    form of the unification and harmonization of
    economic policy, which in its final phase can
    lead to unification of domestic economic policies
    at community level. The economic union supposes
    the introduction of a common or single
    currency, which leads to monetary union. Economic
    and monetary union is the most highly developed
    form of economic integration, and apart from a
    common currency requires common monetary policy
    and a central bank. Economic and monetary union
    presupposes unified market integration in many
    respects follows from it (complete capital market
    liberalization and a single currency).
  • Political union. This involves the gradual
    transfer to community level of power and
    legislative authority (parliament, government,
    jurisprudence, etc.). It assumes the
    establishment of a supranational authority,
    which can take decisions that are binding on all
    the member nation states.
  • Each form represents higher and more developed
    levels of integration.
  • On the basis of various considerations we can
    draw dividing lines between them, but one of the
    most relecant courses open to us is to
    distinguish between forms of market integration
    and forms requiring closer economic policy
    integration and ultimately political integration.

12
V. Customs union theories I.
  • The first comprehensive assessment of the
    advantages and disadvantages of regional
    integration took place within the framework of
    customs union theories.
  • The customs union, as a trade grouping, makes it
    possible to analyse and expand the regional
    implications of the international division of
    labour.
  • The customs union aims at complete internal free
    trade, while applying common external tariffs in
    foreign trade, and a common trade policy.
    Compared with universal free trade it is often
    regarded as a second best strategy, which
    though it achieves regional free trade among the
    partners, nevertheless represents joint
    protectionism with regard to countries outside
    the union.
  • In connection with the customs union, Jacob Viner
    in his study, which has become a classic of the
    integration literature, makes a distinction
    between the effects of trade creation and trade
    diversion.
  • Thus trade creation is regarded as the positive
    effect of customs union. Because of the abolition
    of tariffs, within the union less efficient
    domestic producers with higher production costs
    are no longer protected.
  • Production and consumption is reorganised in
    favour of the new external community partners
    with the lowest costs.
  • Thus new trade is created between the partner
    countries, since costly domestic production is
    now replaced by imports from the other countries.

13
V. Customs union theories II.
  • In comparison with this, trade diversion is a
    negative process and represents a loss.
  • Prior to the customs union, at a given level of
    tariffs in the absence of relative
    discrimination on a given level of tariffs in
    the absence of relative discrimination on a
    given countrys market theoretically all external
    producers could be assumed to have an equal
    chance.
  • In these circumstances any competitors can gain
    advantage only by lowering their level of costs.
  • The situation changes if within the given zone a
    group of countries form a customs union.
    Reciprocal tariff reduction puts the new partner
    countries in a more favourable position in each
    others markets, even to the extent that the
    latter are able to squeeze out former cheaper
    suppliers from non-member countries.
  • Thus trade diversion takes place, which means
    that import is transferred from lower-cost
    external countries to less efficient new
    partners.
  • So while trade creation means replacement of
    domestic products by a cheaper imported ones,
    trade diversion involves replacement of a cheaper
    source of import by another, costlier one.
  • The overall effect of the customs union is given
    by the balance of the two.
  • Jacob Viners original analysis concentrated on
    interpreting trade creation and diversion, and it
    identified gains and losses mainly from a
    theoretical point of view.
  • James Meade was the first to attempt a
    comprehensive quantification of all the effects
    of a customs union.

14
V. Customs union theories III.
  • Meade pointed out that in analysing the
    advantages to be gained from a customs union, not
    only the volume of trade created and diverted but
    also cost savings per unit of product must be
    taken into account.
  • He observed that through it is directly possible,
    as a result of customs union, for the volume of
    trade diverted to be greater than the volume of
    trade created, customs union as a whole
    profitable. The reason for this is that the cost
    savings associated with trade creation are great
    enough to counterbalance the losses due to trade
    diversions.
  • In quantifying the effects of customs union,
    Meade introduced the distinction between the
    so-called production and consumption effects.
  • The assessment of the advantages and drawbacks of
    customs union can be made more accurate by taking
    the consumption effects into account.
  • The supplementary consumption effect and the
    gains from it may be great enough in themselves
    to counterbalance the negative production effects
    of trade diversion. In order to calculate this it
    is necessary to quantify the consumption effects.
  • The amount of gain may be determined by
    multiplying the difference in prices before and
    after the union by the supplementary volume of
    import expanded as a result of the consumption
    effect. This must be added to the gain resulting
    from trade creation.
  • Customs union theories examine the advantages and
    disadvantages deriving from trade creation and
    trade diversion using a comparative approach. At
    the same time they analyse the effects and
    consequences on micro- and macro level as well.
    The gains and losses are examined not only in
    national economy dimensions, but on the global
    world economy as well. In contrast to universal
    free trade, every customs union necessarily
    involves a lesser or greater degree of trade
    diversion and represents sub-optimal utilization
    of resources.

15
VI. Liberal integration theories
  • On the dominant trends of international
    integration theory is represented by the liberal
    or neo-liberal schools.
  • The liberal theory of integration rests on the
    premises of classical economics, the principles
    of unlimited free competition and free trade.
  • According to them, integration is possible where
    free movement of goods and services and factors
    of production exists and there is unlimited free
    competition (Aron 1953).
  • Several aspects of the liberal concept of
    integration must be highlighted. One is that,
    according to the schools of economics,
    integration is achieved through the four
    freedoms, the free and intensive flow of
    goods, services and the factors of production.
  • Integration is identified with freedom of flow
    and movement by the so-called communication and
    cooperation schools as well. They extend the free
    flow requirement to every area of social and
    economic life, not just economic cooperation
    (free trade and flow of production factors) but
    to social, political and cultural relations as
    well.
  • Integration means the approximation to each other
    of levels of economic development and the gradual
    disappearance of differences.
  • In a certain sense factor-prize equalization
    implicitly presupposes that behind it there is
    equalization of productivity levels, which in
    turn implies similar levels of development.
  • Liberal theories can best be interpreted with
    reference to the free trade area, customs union,
    common market and single market.

16
VII. Institutionalism and integration I.
  • It is a fact that integration is a structured
    process, and various institutions promote
    cooperation and interweaving.
  • The schools of theory that focus their analysis
    on institutions and questions of organization are
    generally described as institutionalist.
  • International economic integration, often termed
    regionalism, may be defined as the institutional
    combination of separate national economies into
    larger economic blocs or communities (Robson).
  • According to the concept of institutionalists
    political struggles are mediated by prevailing
    institutional arrangements.
  • New institutional theory treats institutions as
    instruments capable of producing determinate
    policy and of shaping the pattern of political
    behaviour, thus going beyond the formal organs
    of government to include standard operating
    procedures, so-called soft-law, norms and
    conventions of behaviour (Bulmer).
  • Institutions are an important framework for any
    social activity they represent a certain
    institutional architecture they set the norms
    and rules of the game they provide the
    necessary policy instruments and procedures and
    are usually associated with conventions, symbols
    and cultures.
  • Rather that being a simple and passive vessels
    within which politic occurs, institutions provide
    contexts where actors can conduct a relatively
    higher proportion of positive sum-bargains.
    Institutions offer information-rich venues
    where transparency prevails and where trust is
    high. They act as intervening variables between
    actor preferences and policy outputs (Rosamond).

17
VII. Institutionalism and integration II.
  • The heavy institutionalization associated with
    the early communities was particularly emphasized
    or, to put it differently, integration can be
    defined as institutionalized cooperation.
  • Such organizational forms as the free trade area
    or economic union can serve as general
    frameworks, which are supported by other
    functional and political institutions.
  • The institutionalist approach integration mainly
    from the political side and they link economic
    integration with political integration.
  • According to the institutionalists, political
    integration consists in a transfer of power
    (decision-making, legislation, governance and
    implementation) from the national level to
    international (or community) institutions.
  • According to Etzioni, the criterion of
    integration is the existence of central
    executive organs and common centers of
    identification.
  • In addition to national parliaments, governments
    and other powers institutions there is therefore
    an increasing need for community institutions for
    legislation and governance, and competences and
    power are gradually shifting to that level.
  • The institutionalist integration theories are
    closely related, in fact, comprising several
    schools or trends, depending on how they see the
    relations between the new integration
    institutions and the national states
    (intergovernmentalism, federalism, confederalism,
    consociation).

18
VIII. Federalism contra intergovernmentalism I.
  • The federalists favour supranational, effective
    community power structures and institutions
    (Haas, Pinder, Montani).
  • Federalism has acquires increasing political
    influence in the EU countries, and has exerted
    effective pressure in the direction of political
    union.
  • The majority of federalists support worldwide
    political integration (world government). The
    main aim of Eurofederalists is the creation of
    the United States of Europe.
  • One of the outstanding proponents writes that
    federalists point out that the national states
    have lost their proper rights since they cannot
    guarantee the political and economic safety of
    their citizens. They also insist that European
    Union should be brought about by the European
    populations, and not by diplomats, by directly
    electing a European constituent assembly
    (Spinelli).
  • For these reasons, federalism is particularly
    preferred by some small states.
  • They feel that their interests can be better
    represented in a legally framed setup than in
    intergovernmental structures, where the informal
    decision-making processes favour the larger
    states.
  • The first backlash against federalism took place
    in the mid of 1960s. Charles de Gaulles empty
    chair action was the culmination. There was a
    certain reassertion of nationalists sentiment
    among the European political elite. Emphasis was
    placed on national interests, and the centrality
    of member-state governments prevailed over
    emerging institutions. It was asserted that
    states should be regarded as primary actors in
    the integration process.
  • After 1980s the integration process was
    accelerated (adoption of the Program of the
    Single European Market)

19
VIII. Federalism contra intergovernmentalism II.
  • Many maintain that in spite of the ups and downs
    of integration processes, the intergovernmentalist
    character of European institutions and decision
    making prevailed, and there has not been any
    breakthrough toward supranational federal
    structures.
  • The predominant direction of integration was
    liberalization (the single market), and even the
    positive integration measures were subordinated
    to the aim of the perfect functioning of that
    liberalized market.
  • Monetary union, to a large extent, followed from
    the single market project, and the transfer of
    monetary policy to union level has not yet
    changed this trend.
  • At the same time, the national states were
    successful in maintaining their primacy in
    strategic decisions.
  • The theory which tries to describe these types of
    developments is called liberal inter-governmentali
    sm.
  • Andrew Moravcsik is the main representant of
    liberal inter-governmentalism theory.
  • Moravcsik, for his part, by developing a
    state-centric theory of liberal
    intergovernmentalism, describes the Union as a
    regime that makes inter-state bargaining more
    efficient, whilst enhancing the role of national
    leaders.
  • According to the definition of Murray Forsyth the
    EU can be explained as a confederation a
    voluntary association of states with common
    interests in building larger markets.
  • Institutionalization is necessary to ensure the
    stability and longevity of the systems.

20
IX. Integration and regulation I.
  • One main trend of criticism of the liberal
    theories is that they overlook the importance of
    regulation of the economy. They said that free
    market mechanisms were not capable of creating
    integration.
  • They approach integration from the side of
    economic policies and their attention is directed
    mainly towards economic union, as a form of
    integration.
  • Regulatory theories do not deny the importance of
    the market and of liberalization, but they
    emphasize that present-day economies are no
    longer based on free-market mechanisms in the
    19th century sense, but that economic life is
    influenced, regulated and directed by the state.
  • According to regulatory theories, in addition to
    the market, economic policies have to be
    integrated, which on the international level
    enables international economic policies to be
    unified, harmonized, and in certain cases
    implemented in a collective, community manner.
  • Thus international integration means state
    regulation and intervention is carried out at
    international (community) level.
  • The most important representative of integration
    theories related to regulation is Jan Tinbergen.
  • According to Tinbergen Integration may be said
    to be the creation of the most desirable
    structure of the international economy, removing
    artificial hindrances to its optimum operation
    and deliberately introducing all the desirable
    elements of coordination and unification. The
    problem integration, therefore, forms a part of a
    more general problem, namely that of the optimum
    economic policy (Tinbergen).

21
IX. Integration and regulation II.
  • In Tinbergen's conception integration is an
    optimal economic structure which on the one
    hand removes artificial hindrances to market
    optimalization, and on the other hand helps to
    form the optimum economic policy.
  • Thus international integration means that
    economic optima are not attainable within
    national frameworks but require the development
    of international institutions, mechanism and
    regulation.
  • Policy optimalization refers to the fact that
    ultimately, international economic integration
    has to be viewed as a state and process for
    enabling its participants to achieve a variety of
    common goals more effectively by joint or
    integrated action than they could by unilateral
    measures (Robson).
  • The difference between liberalization, the
    removal of artificial barriers, and the
    integration of economic policies is expressed by
    Jan Tinbergen through the introduction of the
    concept of negative and positive integration.
  • Negative integration means measures consisting of
    the abolition of a number of impediments
    (elimination of customs, quantitative
    restrictions and liberalising the market) to the
    proper operation of an integrated area.
  • Positive integration means the creation of new
    institutions and mechanism and their instruments
    or modification of existing instruments.
  • Giandomenico Majone considers the EU as more and
    more an instance of a regulatory state, or at
    least one which is one the way to becoming such
    an entity. According to him, the regulatory state
    may be less of a state in the traditional sense
    than a web of networks of national and
    supranational regulatory institutions held
    together by shared values and objectives, and by
    a common style of policy-making.

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X. From functionalism to neofunctionalism I.
  • For the functionalist integration theories the
    most important question is the appropriateness
    and effectiveness of regulation.
  • The functionalist schools emphasize directly on
    better functioning of the integration system, and
    on the improvement of its functioning.
  • According to the functionalists, the nation state
    is increasingly incapable of fulfilling its basic
    social, economic and political tasks. Therefore
    more and more shared aims and functions should be
    delegated to the more efficient integration
    organizations, which are capable to implement
    these more perfectly.
  • The functions may be economic, political, social,
    infrastructural or military. In these spheres
    they can represent more efficient solutions to
    tasks like economic growth or the acceleration
    of technological progress, development of
    infrastructures at international level
    (construction of a community road network or
    communication system), equalization of
    development levels or in fact greater military
    security.
  • The functionalists are aware that shifts in the
    exercising of functions presuppose institutional
    changes.
  • The main endeavor of functionalist is to create
    supranational institutions.
  • The theory of functionalism in international
    relations is based on the hope that more and more
    common tasks will be delegated to such specific
    functional organizations and that each of these
    organizations will become in time supranational
    that is, superior to its member governments in
    power and authority.
  • In this way, says this theory, the worlds
    nations will gradually become integrated into a
    single community within which war will be
    impossible (Deutsch).

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X. From functionalism to neofunctionalism II.
  • Functionalists, like federalists, consider
    democratic political support important also from
    the point of view of the successful operation of
    institutions.
  • The so-called neofunctionalists (Haas and Leon
    Lindenberg) emphasize prosperity, internal peace
    and external security, the role of national
    political elites, and in contrast to the global
    view, the possibility of regional integration.
  • But the functionalists were originally in favour
    of universal peace and were against regional
    integration.
  • One of the most controversial ideas of
    neofunctionalists is the notion of spillover.
    The idea of spillover was used to depict the
    mechanism supposedly driving processes of
    regional integration. The creation and deepening
    of integration in one sector would create
    pressures for further economic integration within
    and beyond that sector, and greater authoritative
    capacity at the European level.
  • The theory of spillover was questioned primarily
    by intergovernmentalists. They criticized the
    notion of any automatism or functional dynamism
    which would drive integration processes.
  • Instead they emphasized the importance of
    national interests, and the primary role of
    national actors.
  • As opposed to the neofunctionalists,
    intergovernmentalist theorists also denied the
    need for supranational institutions.
  • The neofunctionalists emphasize the importance of
    the European Commission and the role of national
    and transnational interest organizations. The
    arguments of neofunctionalists were reinforced by
    the new developments of the 1980s, particularly
    the launching of the program of the single
    European market, and then the amendment of the
    Single European Act.

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XI. Multi-level governance I.
  • The main role of the multi-level governance is
    to reveal of improving the conditions of human
    governance.
  • The latter may be defined as the art of
    organizing the production of knowledge about the
    constitution of human activity.
  • By theorizing is meant the systematic study of
    the conditions, structure and evolution of that
    constitution, by means of explicating,
    interpreting, understanding and, where possible,
    predicting individual, small- or large-scale
    social action (Chryssochoou).
  • Multi-level governance amounts a multilayer
    polarity, where there is no centre of accumulated
    authority but where changing combinations of
    supranational, national and subnational
    governments engage in collaboration (Hooghe).
  • Multi-level governance is a product of
    integrating world economy, which with growing
    interdependence, both regionally and globally, is
    a response to new challenges and needs in
    controlling and managing complex processes and
    harmonizing interests within a multi-actor
    system.
  • The point of departure for this multi-level
    governance (MLG) approach is the existence of
    overlapping competencies among multiple levels of
    governments and the interaction of political
    actors across those levels. States are not an
    exclusive link between domestic politics and
    intergovernmental bargaining in the EU. Instead
    of the two-level game assumptions adopted by
    state-centrists, MLG theorists posit a set of
    overarching, multi-level policy networks. The
    structure of political control is variable, not
    constant, across policy areas (Marks, Nielsen).

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XI. Multi-level governance II.
  • Multi-level governance means the emergence of a
    new structure, where the constitutional
    foundations of sovereignty may remain largely
    unchanged, leaving national member states as
    basic entities, but at the same time, it
    challenges the functional or operational autonomy
    of states by sharing decisions, and pursuing
    certain policies in a shared way.
  • Compared to intergovernmentalism, multi-level
    governance brings in a third dimension into the
    operational structure of the Union, namely
    domestic, local or sub-regional interests and
    actors.
  • The Union is interpreted as a multi-level system
    of governance composed of interlocked arenas for
    political contest, where direct links are
    established among actors in diverse political
    spaces and political domains, where political
    control is diffuse.
  • European integration can be seen as a distinct
    West European effort to contain the consequences
    of globalization (Wallace).
  • It should be noted that as integration extends
    more and more to global dimensions
    (globalization), that creates its own issues and
    needs (global governance).
  • According to the definition of Mihály Simai
    Global governance is in fact a part of a
    multi-level governance system which will retain
    this forum of states while making room for the
    growing number of important non-state actors in
    the worlds economy and politics.
  • From the point of view of European governance it
    means that it has to take on certain global
    roles, while on the other hand it is a certain
    dimension of global governance.

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XI. Multi-level governance III.
  • The European Commission published a White Paper
    on future reform of European Governance in July
    2001.
  • The main objective of the white paper is to
    reform and improve the governance system of the
    Union by the creation of greater coherence among
    the different policies of the Union, increase the
    efficiency of these policies, and bring them
    closer to the citizens.
  • The Commission determines five principles of
    good governance, which must guide the reforms
    concerning the improvement of the decision-making
    and executive system of the Union.
  • These are the followings
  • 1. Openness (more open operation of
    institutions, and more active communication
    toward public opinion).
  • 2. Participation (inclusion of the citizen, the
    different organizations, etc. in the decisions
    and actions).
  • 3. Accountability (greater transparency and
    responsibility).
  • 4. Efficiency (in terms of both settling
    objectives and implementation).
  • 5. Coherence (relevant definition of
    objectives, and better coordination among
    policies).
  • These five principles are strengthened and
    supplemented by two traditional concepts,
    proportionality and subsidiarity (the chosen
    measures should be proportional to objectives and
    the level of action /regional, national or union/
    should be appropriately chosen.

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XII. Some possible theoretical interpretations of
international integration I.
  • Obviously, the various schools of integration
    theory approach the process of unification, and
    mutual adaptation from different sided and with
    differing emphases.
  • The various theoretical schools and trends call
    attention to the important interconnections of
    integration theory.
  • Integration as a historical process, which cannot
    be limited to the unification or interconnection
    of national economies. The modern national states
    of Europe, in the course of the recent history of
    the continent, evolved basically from uniting of
    cities, principalities or provinces. Integration
    to form a nation is a complex process, and has
    taken place in very varied ways in different
    regions of the world (Brazil, the USA, India,
    etc.) and this applies to integration on the
    international level, too.
  • On an international scale, integration appears
    to have been taking place in recent decades
    within organized, institutional frameworks. One
    of the most important characteristics of
    international integration at present is that it
    can be defined as the voluntary, comprehensive
    economic and political linkage of sovereign
    states and national economies.
  • International integration is regarded by most of
    the theoretical school as a multi-level process.
    Its important to make a distinction between the
    concepts of micro- and macroeconomic integration.
  • Microintegration is a process that takes place
    between individual actors in re-production, in
    the form of international production, sales,
    market, technical and development cooperations or
    joint ventures.
  • Macrointegration is a process of unification
    involving the whole society, which takes place
    between national economies as units.

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XII. Some possible theoretical interpretations of
international integration II.
  • The national economy is ultimately the
    integration of individual producers and traders,
    which can be understood as the interlinking of
    the re-production processes.
  • It is characteristic of the world of the world
    economy today that company, national, regional
    and global integration processes are going on
    parallel with one another they have reciprocal
    effects and are interlayered in a comprehensive
    manner.
  • The economy and economic relations build from
    below, and the laws of their operation always
    take effect through the activity of the
    individual (producer, consumer, entrepreneur,
    taxpayer etc.). Their attitudes, behaviour and
    actions are motivated by interest.
  • The individual plays as the chief actor in
    society and the economy, thats why integration
    is based on how and in what frameworks the
    individuals socio-economic activity and life is
    organized.
  • Integration can be thought of as a process and as
    a state. In the static sense, economic
    integration can be seen as a situation in which
    the national elements of a larger economy are no
    longer divided by economic boundaries but
    function together as a unit.
  • As Béla Balassa points out the integration as a
    process covers those measures, which aim at
    eliminating discrimination among the economic
    units belonging to different national states.

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XII. Some possible theoretical interpretations of
international integration III.
  • Integration is an organic process, which evolves
    from the rational activity of economic actors and
    the more efficient operation of the economy.
  • Many think that to regard integration as
    unification is a superficial and quantitative
    approach.
  • Qualitatively the tendency to integration is the
    formation of more highly developed communities or
    organisms of a higher order and increasing
    efficiency and effectiveness.
  • In the economic sense this means that
    increasingly finer and more complex
    specialization and cooperation on the part of the
    individual producer and consumer take place, and
    their social activities are organized into
    increasingly efficient organisms from the level
    of direct production (the microeconomic sphere)
    to that of national economy or world economy (the
    macro- or megaeconomic sphere).
  • In this context integration is a comprehensive
    process, which encompasses every area of social,
    economic, political and cultural life, including
    individual human relations and macrosocial
    relations.
  • International integration is a democratic
    process.
  • Integration, as unification and interconnection,
    ultimately leads to the weakening of the given
    national economy and limitation of its
    sovereignty.
  • Democracy is a value concept which is accepted by
    broad masses, and which in the last few decades
    has become closely associated with the concept
    and process of European integration.

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Conclusion
  • For pragmatic reasons, for a long time the
    literature on integration attached particular
    importance to the forms of integration, and
    cost-benefit analysis.
  • In connection with eastward expansion, from the
    1990s the question of integration maturity
    appeared on the agenda.
  • With the development and increasing complexity of
    the integration process it became more and more
    necessary to solve the questions of governance.
  • Regarding the content, forms and effect
    mechanisms of the integration processes a number
    of theoretical schools have emerged, each
    emphasizing a different aspect of integration
    together they provide a comprehensive picture and
    ultimately they express the evolution of the
    process in all its complexity.

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