Benefits of Regional Integration: Redefining the Concept

Abstract

Abstract For decades, the topic of regional integration has been considered in research through its economic benefits. The classic theories of customs unions and optimum currency area, together with, to a lesser extent, the new regionalism approach are based on analyses of potential costs and benefits of regional associations. Regional integration is traditionally understood as a way to encourage trade flow between member states, to facilitate more efficient allocation of resources by stimulating competition by increasing the capacity of the internal market. That is expected to result in faster economic growth and, consequently, increased per capita income. The 70-year history of the European Union provides sufficient research material to analyze whether economic benefits truly are the main driving force of regional integration. With this goal in mind, the presented article first sums up the key reasons for the post-war unification of Western Europe, then explores the position of the cost-benefit analysis in the theory of regional integration, and finally analyzes the degree of influence of welfare effects on strategic decisions of the European Union. The analysis shows that economic gain is not an immanent property of regional integration: it does not occur at all stages of the process and is neither its primary goal nor its driving force. Instead, regional integration aims to respond to the changing global order, i.e., help member states strengthen their international position and protect themselves from undesirable external influence. While economic benefits are also important, they are not necessarily the decisive factor.