The Theory of Economic Integration

TABLE OF CONTENTS

LIST OF TABLES ... xiii

1 INTRODUCTION ... 1

The Concept and Forms of Integration. The Recent Interest in Economic Integration. Integration and Politics. The "Liberalist" and the "Dirigist" Ideal of Economic Integration. Economic Integration and Welfare. Some Fundamental Problems of Integration. Appendix: The Sectoral Approach to Integration.

PART I. THE STATICS OF ECONOMIC INTEGRATION

2 COMMODITY MOVEMENTS: PRODUCTION ASPECTS ... 21

The Theory of Customs Unions. Trade Creation and Trade Diversion. Complementarity and Competitiveness. Size of the Union. Propinquity and Transportation Costs. Height of Tariffs. Reallocation of Production in a European Union. Production Effects in a Latin American Union.

3 COMMODITY MOVEMENTS: CONSUMPTION AND WELFARE ASPECTS ... 57

Consumption Effects. Terms of Trade Effects. Administrative Economies. Changes in Welfare. Appendix: Problems of a Free Trade Area.

4 FACTOR MOVEMENTS ... 80
Commodity Movements and Factor-Price Equalization. Economic Effects of Factor Movements. Labor Movements. Capital Movements. Movements of Entrepreneurial Resources.

PART II. THE DYNAMICS OF ECONOMIC INTEGRATION

5 NATIONAL FRONTIERS AND ECONOMIC GROWTH ... 101

Growth Models and Technological Change. Views on the Interrelationship of Market Size and Growth. Market Size and Productivity: Conceptual Problems. Productivity Levels and Market Size. The Market-Size Hypothesis: Criticism and Further Evidence. Large-Scale Economies in Present-Day Integration Projects.

6 ECONOMIES OF SCALE ... 120

Concepts of Internal Economies. Intraplant Economies. A Comparison of Plant Sizes. The Relationship between Plant Size and Productivity: Industry Studies. Plant Size and Efficiency for Homogeneous Products. European Economic Integration and Economies of Scale. Internal Economies in Latin American Union Projects. Interplant Economies.

7 EXTERNAL ECONOMIES ... 144

Concept and Classification of External Economics. Pecuniary External Economies. Market Size and External Economies. Specialization in a Large Market. External Economies in Present-Day Integration Projects.

8 FURTHER DYNAMIC FACTORS ... 163

Economic Integration and Market Structures. Market Size and Concentration. Some Empirical Evidence. Problems of Competition in Present Day Integration. Projects Autonomous Technological Change Risk and Uncertainty in Foreign Transaction Investment Activity in a Union. The Impact of a Union on Non-participating Economies.

PART III. INTEGRATION AND ECONOMIC POLICY

9 REGIONAL PROBLEMS IN A COMMON MARKET ... 191

Location Theory and Regional Analysis. Agglomerative Tendencies in Regional Development. Patterns of Regional Development. Economic lntegration and Regional Policy. The Objectives and Tools of Regional Development Policies in an Integrated Area.

10 HARMONIZATION OF SOCIAL POLICIES ... 211

Wage Differentials within a Union. Social Benefits Financed by Enterprices. Social Benefits Financed from General Taxes. Social Policy Problems in a Union.

11 FISCAL PROBLEMS IN A UNION ... 231

Budgetary Problems in a Common Market. The Harmonization of Production. Taxes Problems of Consumption Taxes in a Union. The Treatment of Direct Taxes.

12 MONETARY UNIFICATION AND THE BALANCE OF PAYMENTS ... 252

Regional Analysis of Monetary Problems. Balance of Payments in a Union. Fixed or Flexible Exchange Rates? Economic Policy for Stability and Growth.

SELECTED BIBLIOGRAPHY ... 274

INDEXES

Author Index ... 293
Subject Index ... 299