It is often suggested that regional integration is good for poverty by increasing trade and investment and creating jobs for the poor. At the same time, the number and scope of regional trade agreements (RTAs) is increasing rapidly. However, there is little about whether and how regional integration provisions affect development and poverty in poor countries. The findings of a multi-country research project reveal that while there is a role for regions, expectations relating to poverty effects should be tempered.
This briefing paper discusses the measurement of the degree of integration in regions, which as well as covering merchandise trade, needs to cover services trade, investment and social programmes. It describes the need for a theoretical framework to assess how regional integration affects poverty, and considers what is known and what needs to be studied to gain a better understanding of how regional integration affects poverty. This is discussed in relation to evidence from econometric studies on regional trade agreements (RTAs) and investment, and country case studies in Bolivia and Tanzania.
Regional Integration and Poverty, Overseas Development Institute (ODI) Briefing Paper March 2005, ODI, London, UK, ISSN 0140-8682, 4 pp.