THEORIES OF INTERNATIONAL ORGANIZATIONSOrganization theorists, especially from sociology, provide insights relevantto studying international organizations as organizations.ORGANIZATIONS are created to solve problems that require collaborativeaction; they are not just mechanical tools doing what their foundersenvisioned.ORGANIZATIONS thus develop mechanisms for learning a newdevelopments in the environment; they search for means of action and todecide what problems can and should be solved.Organizations theorists see organizations as open systems that arecontinually responding to the environment, developing and changing goalsthrough negotiations among the dominant coalitions, and utilizing varioustechnologies.Perrow, 1970.
THEORIES OF INTERNATIONAL ORGANIZATIONSFour concepts drawn from organization theory are particularly usefulfor studying IGOs, NGOs, and MNCs. These are; 1.Organizational Culture 2. Organizational Adaptation and Learning 3. Interorganizational Relations 4. Networks
INTERNATIONAL ORGANIZATIONS INTERGOVERNMENTAL NON-GOVERNMENTAL ORGANIZATIONS (IGOs) ORGANIZATIONS (NGOs) GLOBAL REGIONAL GLOBAL REGIONAL COMMON CHARACTERISTICS OF BOTH IGO AND NIGO• a permanent organization to carry on a continuing set of function• voluntary membership of eligible parties• a basic improvement stating goals, structure and methods of operation• a broadly representative consultative conference organ• a permanent secretariat to carry on continuous administrative, research and information functions.•NGOs are voluntary organizations formed by individuals to perform a variety of functionsand roles.
CHIEF FUNCTION OF INTERNATIONAL ORGANIZATION’S IS TO;• PROVIDE THE MEANS OF COOPERATION AMONG STATESIN AREAS IN WHICH COOPERATION PROVIDES ADVANTAGESFOR ALL OR A LARGE NUMBER OF NATIONS.SUBFUNCTION OF INTERNATIONAL ORGANIZATION’S IS TO;•PROVIDE MULTIPLE CHANNELS OF COMMUNICATION AMONGGOVERNMENTS SO THAT AREAS ACCOMODATION MAYBEEXPLORED AND ANY ACCESS WILL BE AVAILABLE WHENPROBLEMS ARISE.•THOSE MOST PROBABLY WILL BE THE CHANNEL OF DIPLOMACYAND PEACEFULL SETLEMENT.•IN ADDITION UN SPECIALIZED AGENCIES AND REGIONALORGANIZATIONS PROVIDE MULTIPLE AND CONTINUOUS CONTACTPOINTS THROUGH WHICH ACCOMODATION CAN BE EXERCISED.
AS OF 2008 THERE ARE; 194 NATION STATES (including Kosovo) 300 INTERGOVERNMENTAL ORGANIZATIONs 5000 NON-GOVERNMENTAL ORGANIZATIONsOPERATING IN INTERNATIONAL SYSTEM.ALMOST ALL THE LATTER HAVE BEEN ESTABLISHED THEPAST CENTURY, MOSTLY AFTER WW II.
IGOs and NGOs CAN BE THOUGHT AS GLOBAL and REGIONAL IGOs GLOBAL REGIONAL Multipurpose - Alliance - Functional• UN • ASEAN• League of Nations • EUROPEAN UNION• Universal Postal Union • Organization of African Unity• International Telegram Union • Leage of Arap States• World Health Organization • WEU• World Trade Organization • OPEC• Hague Conference • NATO• Concert of Europe • Rhein and Danube River Co
IGOs and NGOs CAN BE THOUGHT AS GLOBAL and REGIONAL NGOs GLOBAL REGIONAL• Greenpeace • Part of the Some Global NGO for regional function,• Doctor’s Without Borders • UN credited NGOs• Friends of the Earth • Millenium Forum• Jurnalists Without Borders •Peace,security,disarmament• Amnesty International •The eradication of poverty• Human Rigths Watch •Human rights •Sustainable development and environment •The challenges of globalization •Strengthening the UN
CHART OF INTERNATIONAL ORGANIZATIONs THIRTY YEAR’S WAR WORLD WAR II WORLD WAR I Hellenic Union 338 BC Hague United Attica-Delos System Nations Sea Union Treaty of Presburg, Roman 1890- 476 BC 1806 End of Roman Empire 1907 Empire Charter Atlantic San Fransisco Peleponnesian Concert of Union 461 BC Europe 1815 Yalta to Treaty of Hanseatic League of Kadesh Leageu Nations Dumbarton 1295 BC 1356-1669 Oaks onvers. The Treaty of Westphalia Regional International Organizations 1648 1918 1945 1991(1) Peleponnesian Wars (441-445 BC) For 30 year Treaty between Delos Union and Spartan in 445 BC.(2) Tyucidides as first realist wrote his book “Peleponnesian War”(3) While Attica-Delos established in lead of Athens, Peleponnesian Union Sparta.(4) Macedon King Philippos II gathered all Greek city-states in Corinth Conference. Everey member states named “Helen”, Synedrion was common assembely to operate the Union’s function. Synedrion was also a court. Hellenic Unon built up against Persian and defeated her at the end of the war. And Kallias Treaty was signed in 445 BC.(5) Hanseatic League comprised of 100-160 Northern European Cities, was formed to facilitate common monetary, customs union and trade. It was a system of regional federation.(6) Czar Nicholas II, convened two conferences to problem solving and preventing war. All European and non European states icluding Japan, Chine and Latin America.
CHART OF INTERNATIONAL ORGANIZATIONs ECONOMIC Eliminating POLITICAL Poverty COOPERATION Disease ELIMINATING Hunger WAR SOCIALPRE - WESTPHALIAN SOVEREIGNTY TREATY of WESTPHALIA POST- BEYOND- WESTPHALIAN WESTPHALIAN SOVEREIGNTY SOVEREIGNTY
WAR AS A STATE POLICY PARAMOUNT EVIL TO BE ELIMINATED Plato (427-347 BC Confucius(551-479 BC) Aristotle (384-322 BC Mo Ti (500’s BC) St Augustine (354-430) Desiderus Erasmus (1466-1536) Thomas Aquinas (1225-1274) W.Ellery Channing (1780-1842) Pierre Dubouis (1250-1322) Norman Angell (1874-1967) Hugo Grotious (1538-1645) William Penn (1694 Jeremy Bentham (17UNIVERSALIST-WORLD GOVERNMENT A Hobson (1902- Richard Cobden (1804-1865) Emeric Cruce(1623 Dante Alighieri Cicero Seneca Abbe de St Pierre (1700’s Emanuel Kant (1795 William Ladd (1840
PLATO ;State should not neglect its military defense, but the ideal state would bean isolated, self sufficient unit with a little dependence on the rest of theworld as possibleARISTOTLE ;He generally opposed war except in self defense, but because he believed thatsome people were suited only to serve as slaves, so he justified the conquest ofinferior people.ST AUGUSTINE ;He disapproved of war of conquest but accepted war of defense. The churchduring the middle age generally accepted war under certain conditions. Forexample war against infidel were approved, but among chiristians wereundesireable.THOMAS AQUINAS;Acceptance war is inhuman but crusaders.DANTE – CICERO - SENECA;Service to the world socıety, , universal and superior law of justice.
ABBE DE SAINT PIERRE ;Both advice that establishment of general parliament or assembly to settle alldisputes by a three-fourths vote, with collective sancstions including armedforces.PIERRE DUBOIS;He suggest Christion Ruler under French leadership. War should be prohibitedamong christians but encourages against infidel.EMMANUEL KANT ;Main element of him a federation open to voluntarily membership of any state, acongress to settle dispute, no standing armies, free movement from one countryto another.WILLIAM LADD ;“Essay on a Congress Nations” He takes the US and Swiss government as amode. He advocated the establishment of a congress of nation and Court ofNations with legislative and judicial.RICHARD COBDEN ;His suggest is interdependence of states. Universal organization not limited tochristian ruler, promotion of trade.
INTEGRATIONIntegration is defined as the voluntary linkingin the economic domain of two or moreformerly independent states to the extendthat authority over key areas of domesticregulation and policy is shifted to thesupranational level.
REGIONAL INTEGRATIONRegional integration is the process ofproviding common rules, regulations, andpolicies for a region.
WHAT IS REGION ?Groupings of countries that interact wellbeyond what is expected on the basis ofcountries relative contributions to worldimport and exports.If region has boundaries, these boundariesare usually vast grey in tones and shadesrather than black and white.(Richard Savage and Carl Deutsch, 1960)
THREE CRITERIA FOR THE DEFINITION OF REGIONS;. PHYSICAL PROXIMITY AND SEPARATENESS, - Although related with the geography, even today it does not follow automatically that the political and cultural patterns shaped by geography have been eroded.. INTERDEPENDENCE - As economic terms, interdependency refers to interconnectedness of among countries. A region in this sense is a zone where there is a high density of economic transactions relative to other units. HOMOGENITY - A large number of variables fit within this framework; similarity of of values, of economic systems, of political systems, of way of life, of level of economic development and so on.(Bruse Russett, International Regions and the International System, 1967)
INTEGRATIONMost political scientists studying integrationhave been primarily interested in understandingthe institutional and policy dimensions ofintegration.They have sought to specify the political contextin which integration occurs and have providedinsightful accounts of the process of integration.
INTEGRATIONThe critical question related with integration is;Which forces drive the process of voluntaryintegration?There are basicly three types of so-calledexplanations, mostly taking into consideration ofEuropean Union. These are not wrong, but failbasic tests of scientific inference. At least theyare insufficient.
INTEGRATIONThe critical question related with integration is;Which forces drive the process of voluntaryintegration? First;It is said that politicians, hounted by the horrorsof the Second World War, were naturally drivento devise a novel structure of Europeangovernance capable of eradicating the veryroots of intra-European conflicts.
INTEGRATIONThe critical question related with integration is;Which forces drive the process of voluntaryintegration? Second;Charismatic leaders, it is alleged, managed totranscend the narrow-mindedness andselfishness of domestic pressure groups hostileto integration and European unity.
INTEGRATIONThe critical question related with integration is;Which forces drive the process of voluntaryintegration? Third;An ever-popular third explanation refers tochanged preferences. The timing of a newapplication for membership, it is claimed, isattributable to the pressure from growingsegments of society desirous of beingconnected to the larger “Euro-culture.”
TYPES OF INTEGRATIONAt various times, social scientists have searchedfor more rigorious explanations of economic andpolitical integration. In political science, threemajor analytical framework for understandingintegration. Functionalism, Neofunctionalism, Intergovermantalism.
TYPES OF INTEGRATIONEconomists who study regional integration lookprimarily at market relationship among goods andfactors of production within a region and assumeaway the relevance of institutional and politicalforces. They are interested in the welfare effectsof integration. Customs union theory Optimal currency area theory The fiscal federalism theory
TYPES OF INTEGRATIONOne explanation of integration in political scienceis functionalism. It refers global integration basedon world peace. Peace is more likely workingtogether in workshops and marketplace than bysigning pacts in chancelleries.Other explanation of integration in politicalscience is neofunctionalism. It refers to regionalintegration. It bring a critics to functionalismwhich functionalism as a teleologic.Intergovernmentalism is an alternative approachto integration in political science. Unlikeneofunctionalism it assigns a central role toheads of states.
WEAKNESSES OF THESE EXPLANATIONSfunctionalism.neofunctionalism.Intergovernmentalism
TYPES OF INTEGRATIONCustoms union theory seeks to understand thewelfare implications of integration in terms oftrade creation, trade diversion, and terms of trade.Optimal currency area theory specifies conditionsunder which integration in the monetary domain iseconomically efficient.The fiscal federalism theory aIso seeks to issuesof regional integration.
WEAKNESSES OF EXPLANATIONSCustoms union theoryOptimal currency area theoryThe fiscal federalism theory
THEORETICAL APPROACHES TO INTEGRATION Political Approaches Economical ApproachesFunctionalism Intergovermentalism Customs Fiscal Union Theory Federalism Neofunctionalism Optimal Currency Area
THEORETICAL APPROACHES TO INTEGRATION Political Approaches Economical ApproachesFunctionalism Intergovermentalism Customs Fiscal Union Theory Federalism Neofunctionalism Optimal Currency AreaDavit Mitrany Andrew Moravcsik 1943 1993 Earns Hass 1958 A Working Peace Preferences & Power System in the EU Community Uniting of Europe
THEORETICAL APPROACHES TO INTEGRATION Political Approaches Economical ApproachesFunctionalism Intergovermentalism Customs Fiscal Union Theory Federalism Neofunctionalism Optimal Currency AreaDavit Mitrany Andrew Moravcsik Jacop 1943 1993 Viner 1950 Earns Hass Robert Mundall 1958 1953 A Working Peace Preferences & Power The Customs System in the EU Community Union Uniting of A Theory of Optimal Europe Currency Area
FUNCTIONALISMMain proponent, (Roman academician) Davit Mitrany,The book, A Working Peace System
FUNCTIONALISMFundemental aspect of functionalism orfunctional method is that “sovereignty cannot be transfered effectively through aformula only through a function”.
FUNCTIONALISMFunctionalism begins with the assumptionthat; supranationality is the only methodavailable to states to secure maximumwelfare and then proceeds to provide aninsightful account of how integration evolvesusing concepts such as functional spillover,updating of common interests , andsubnational and supranational groupdynamics.
FUNCTIONALISMHis assumptions is based on that nationstates capabilities doing things efficient lessthan the capabilities of internationalorganizations.
FUNCTIONALISM“problem of our time is not how to keepnations peacefully apart but how tobring them actively together”Peace “is more likely to grow throughdoing things together in workshops andmarketplace than by singing pacts inchancelleries”
FUNCTIONALISMMitrany claim that nationalism is threat toworld peace. He insists that dependenciesamong nations based on mutuallycooperation and beneficiary agricultural,health, transportation and other areas likethese should be reverse from national levelto international.
FUNCTIONALISMCoactivity rather than nationalcoexistance defines the ideal ofpeace.He put his faith “not in protectedpeace but in a working peace”.
FUNCTIONALISMFunctional cooperation does not start from thepolitical but from the low-key economic andsocial plane such as the joint management ofscarce resources, unemployment, commodityprice fluctuations, labor standarts, and publichealth.
FUNCTIONALISM• Functionalism is applicable at both regional and global levels and has been important in explaining the evolution of the European Union as a process of economic integration, gradually spilling over into limited political integration.
FUNCTIONAL INTEGRATIONFunctional Integration, that is, the provisionof common rules, regulations, and policiesembodied in an integrated governancestructure, may begin with exchance ratecoordination.
FUNCTIONALISM The weaknesses of functionalism;1. It is not properly speaking a theory of integration but rather than a normative method.2. Integration is in fact sought to secure peace, is not fully compelling. (Why were not all European countries participating in the peace-building effort from the begining?)
Comparing Functionalism to Realism John McCormick compares functionalisms fundamental principles with realisms thus: Realism FunctionalismDominant goals of Military security Peace and prosperityactors Economic instrumentsInstruments of state Military force and and political acts ofpolicy economic instruments will Initial emphasis on low Potential shifts in theForces behind agenda politics, such as balance of power andformation economic and social security threats issues Substantial; new, functional international Minor; limited by state organizations willRole of international power and the formulate policy andorganizations importance of military become increasingly force responsible for implementation
NEOFUNCTIONALISM• One of its protagonists is Ernst B. Haas, a US-political scientist. His book is “The Uniting of Europe”.• Unlike previous theories of integration, functionalism; neofunctionalism declared to be non-normative and tried to describe and explain the process of regional integration based on empirical data.
NEOFUNCTIONALISM• In a significant departure from functionalism, it shifts its analytical focus from the teleology, a working peace system, to the utilitarian dimension of the functional method. This makes it gain analytical clarity and powerful implications.
NEOFUNCTIONALISMNeofunctionalist approach isconcerned with explaining “how andwhy nation-states cease to be whollysovereign, how and why voluntarilymingle, merge, and mix with theirneighbors so as to lose the factualattributes a sovereignty while acquiringnew techniques for resolving conflictsbetween themselves.
NEOFUNCTIONALISM• Neofunctionalism, describes a process” whereby political actors in several distinct national settings are persuaded to shift their loyalties, expectations, and political activities towards a new and larger center, whose institutions possess or demand jurisdiction over the pre-existing states.
NEOFUNCTIONALISM Neofunctionalism’s main analytical attributes are;• The actors Interest groups, PP – NATION STATE – Supranational RI• The motives Good Europeans are not the main creators of the community• The process Spillover( functional, political ), upgrading common interests• The context Against functionalism, for neofunctionalism economy and politics can not be separable.
NEOFUNCTIONALISM AS A COMPOSITE THEORY, NEOFUNCTIONALISM HAS THREE COMPONENTS • BACKGROUND CONDITIONS • PROCESS CONDITIONS • CONDITIONS THAT ARE LIKELY TO ENCOURAGE OR DISCOURAGE TASK EXPANSION(Hass, and Schimitter, 1964)
NEOFUNCTIONALISM AS A COMPOSITE THEORY, NEOFUNCTIONALISM HAS THREE COMPONENTS• BACKGROUND CONDITIONS –Neofunctionalism argued that integration was most likely emerge to first among countries with a certain type of domestic environment; liberal democratic countries with advance capitalist economies, differentiated social structures, and highly pluralistic interest group structures. –In these societies class conflicts were to be muted, ethnic rivalries less intense and warfare an obsolescent institution. –Such countries would have much to gain from an expansion of capitalism to the regional level.
NEOFUNCTIONALISM AS A COMPOSITE THEORY, NEOFUNCTIONALISM HAS THREE COMPONENTS• PROCESS CONDITIONS• PC’s entail dense network of economic exchange, trade, labor migrations, tourism and free flows of productive factors.
NEOFUNCTIONALISM AS A COMPOSITE THEORY, NEOFUNCTIONALISM HAS THREE COMPONENTS• THAT ARE LIKELY TO ENCOURAGE OR DISCOURAGE TASK EXPANSION CONDITIONS• This phase involves spillover. Once integration begins in initial settings (presumably least controversial ones), there are prospects for expanding cooperative habits into other ares. This process is labeled spillover.• Spillover could be purely functional with linkages among different sectors serving as the transmission belts of integration,( trade might imply increasing ccordination of monetary policy for example) or it could rely on tactical linkage among sectors by agent in a bargaining process.
NEOFUNCTIONALISM NINE VARIABLES FOR ECONOMIC AND POLITICAL UNION• BACKGROUND CONDITIONS 1. Size of units, 2. Rate of transactions, 3. Pluralism, 4. Elite complimantarity• PROCESS CONDITIONS 5. Decision-making style 6. Rate of transaction, 7. Adaptability of governments• CONDITIONS THAT ARE LIKELY TO ENCOURAGE OR DISCOURAGE TASK EXPANSION (ECONOMIC UNION) 8. Government purposes, 9. Independence of regional institutions.(Hass, and Schimitter, 1964)
NEOFUNCTIONALISM LAST WORDS ON NEOFUNCTIONALISMIf a group of countries maintains a high degree ofeconomic and social transactions,and at the same time shares pluralist domesticinstitutions with similar economic size and similar levelof development,it will have a good chance of achieving political union.
INTERGOVERNMENTALISM• Intergovernmentalism can best be understood as a series of bargain between the head of the governments of the leading states of the region.• The emphasis of intergovernmentalism on head of states as central players is a key difference between it and neofunctionaism.
INTERGOVERNMENTALISM• While neofunctionalism starts with transnational society and supranational institutions, liberal intergovernmentalism places states(central governments, usually executively) at the center of analysis.• This is not to say that interest groups are unimportant. Albeit, crucial to integration are the process of interest aggregation, intergovernmental bargaining, and enforcement of decision.
Aware of some of these weaknesses, intergovernmentalists have sought to expand their theorical approach.A liberal Intergovernmental Approach (1993) AndrewMoravcsik* lays out a two-step process of preferenceformation and bargaining which he extends(1998) to athree-step process; - preference-formation, - intergavernmental bargaining - institutional lock-in of bargains.*Preferences and Power In the EU, A Liberal Intergovernmental Approach.
Aware of some of these weaknesses, intergovernmentalists have sought to expand their theorical approach.The liberal intergovernmental approach provides a moresophisticated theory of preference formation thanneofunctionalism.This theory is based in part on the logic of collectiveaction and the new institutionalism.But LIA is still vulnerable on several grounds. “What isthe relationship between grand bargains and day-to-daypolitics in regional organizations?”
As a theory of integration intergovernmentalism suffers from several shortcomings.The theory that focuses only on major interstate (Ge, Fr,i.e) decisions or “celebrated intergovernmentalbargains; it thus is difficult to test.Intergovermentalism argues that the “ups” ofintegration, that is the big decisions, are the result ofconvergence of the preferences of the leading states.
CONSTRUCTIVIST APPROACH TO NEOFUNCTIONALISMThis is a newer approach to regional integration, but again limitedmostly to Western Europe.The core of constructivist research program concerns the role of ideas,norms, and identities as opposed to material factors in the integrationproess.At bottom, constructivism concern the issue of human consciousness.(Ruggie 1998)Human thought, ideas and agency as crucial to the explanation of theinternational order. (Onuf, World of Our Making,1989)
CONSTRUCTIVIST APPROACH TO NEOFUNCTIONALISMThe leading constructivist is Jeffrey Checkel. For Checkel norms canbecome constitutive of agents, part of who they are, and deeplyinternalized.When this occurs, the overall interpretation changes from one based onconscious adjustment to changing costs to one based on enactment ofvalues (a scripted model based on logic of appropriateness rather thana utilitarian one).Jo Shaw has elaborated a changing conception of “postnationalconstitutionalism” in which citizens rights are not fixed, nor limited tothe territorial containers of the state, bur responsive to transbordermovements and demands that are not easily dealt with the nation-states.
CUSTOMS UNION THEORY• Free Trade Area (FTA) refers removing of the tariffs and quotas among the member states.• Custom Union, in addition to FTA, use common external tariffs by the members to the third (non-member) countries.• Custom union theory is mostly concerned with the markets for goods.
OPTIMAL CURRENCY AREA THEORY• In the optimal currency area theory, however the focus is on money, markets for goods and and markets for production factors(land-labor-capital- enterpreneurship).• A currency area is defined as an area in which a common currency exists or in which exchange rates are immutably fixed.• “ Optimality” refers to the ability of an area to achieve both internal balance(full employment, price stability) and external balance( payments equilibirium) in the least costly way, without much interference from monetary and fiscal policies.
FISCAL FEDERALISM THEORY• Fiscal federalism theory is an offshoot (branch) of public finance theory that analyzes the special fiscal problems arising in federal countries, drawing on the literature on public goods, taxation and public dept incidence and various parts of location theory.
THEORETICAL APPROACHES TO INTEGRATION Political Approaches Economical ApproachesFunctionalism Intergover Customs Fiscal mentalism Union Theory Federalism Neofunctionalism Optimal Currency Area
EXPLAINING REGIONAL INTEGRATION TWO PUZZLES OR QUESTIONS OF REGIONAL INTEGRATION1.Why have so many 2.What explains whenattempts at integration outsiders seek to becomefailed while a few insiders? (Outsiders canhave been crowned become insiders either bywith success? joining an existing(+EU, +EFTA,-LAFTA) economic union or by creating their own regional group)Implicating the insider --timing of the desicion bycountries in an outsiders countries tointegration process seek integration-- Implicating the outsiders countries in an integration process
EXPLAINING REGIONAL INTEGRATION TWO PUZZLES OR/AND QUESTIONS OF REGIONAL INTEGRATION 2. Implicating the outsiders countries in an 1.Implicating the insider integration process. countries in an integration What explains when outsiders seek to become process. insiders? (Outsiders can become insiders Why have so many attempts at integration failed while a few either by joining an existing economic union have been crowned with or by creating their own regional group) success? (+EU, +EFTA,-LAFTA) --timing of the desicion by outsiders countries to seek integration-- The Condition In Order For Integration to Success The potential for There must be a economic gains fullfilment of supply from markets conditions. These are the exchange within a conditions under which region must be political leaders are significant. willing and able to Economies should accommodate demands be strong. for regional institutions at each step of the integration process. Willingless depends on the payoff integration to political leaders. Although willingness of political leaders may be unable to supply regional institutions because of collective action problems.Areas with stronge market pressurefor integration and indisputedleadership are most likely toexperience successful integration;”commitment institution” help thecatalyze the process.
EXPLAINING REGIONAL INTEGRATION TWO PUZZLES OR QUESTIONS OF REGIONAL INTEGRATION 2. Implicating the outsiders countries in an integration 1.Implicating the insider process. countries in an integration What explains when outsiders seek to become insiders? process. Why have so many attempts at (Outsiders can become insiders either by joining an integration failed while a few existing economic union or by creating their own have been crowned with regional group) --timing of the desicion by outsiders success? (+EU, +EFTA,-LAFTA) countries to seek integration-- The Condition In Order For Integration to Success The potential for There must be a Externalities, Externalities, The supply Integration The external economic gains fullfilment of supply transaction transaction of and effects of from markets conditions. These are the costs, and costs, and İntegration. economic integration. exchange within a conditions under which demand for demand for performans. region must be political leaders are instutitional integration. significant. willing and able to changes. Economies should accommodate demands Demand for İntegration be strong. for regional institutions at on the part of big each step of the business does not integration process. automatically translate Willingless depends on into success.If demand the payoff integration to is not met by supply, no political leaders. Economic change will occur. Although willingness of history political leaders may be unable to supply regional institutions because of Property Transaction Supply conditions are collective action Rights costs the conditions under problems. theory which political leaders Are willing and able to accommodate demandsAreas with stronge market pressure for for functional integration.integration and indisputed leadership are mostlikely to experience successful integration;”commitment institution” help the catalyze the Prisoner’s Dilemma Coordination Gamesprocess.
2.What explains when outsiders seek to become insiders? (Outsiders can become insiders either by joining an existing economic union or by creating their own regional group) timing of the desicion by outsiders countries to seek integration Externalities,transaction Externalities, transaction The supply Integration and The external effects of costs, and demand for costs, and demand for of integration. Economic performans. integration. İnstutitional changes. integration. Affected outsiders can Demand for pursue two integration integration on the strategies part of big business does not automatically Supply conditions are Economic translate into the conditions under “First “Second history success. If demand which political leaders Integrative Integrative is not met by supply, are willing and able to Response” Respond”Property Transaction no change will ccur. accommodate demands (Want to (create a newRights costs for functional integration. participate) İntegration)theory But two problems Prisoner’s Dilemma Coordination Games No interest Price of membership in accepting of a successful union new members is typically very high (membership country should accept so- called Acquis communautarie, for Latin countries also She must accept ”Washington Concensus”
2.What explains when outsiders seek to become insiders? (Outsiders can becomeinsiders either by joining an existing economic union or by creating their own regional group )timing of the desicion by outsiders countries to seek integration Externalities,transaction costs, and demand for instutitional changes. What drives reginol integration process? These theories are primarily concern with the explaining the evolution of domestic institutional arrangements , but their logic can be extended to shed light on the dynamics of regional İnstitution-building. Property Rights Economic Transaction theory history costs This theory identify key The economic history Tc’s are the costs of actors and motives driving school refines the specifying, negotiating, institutional change. PR’s analysis of the impact of monitoring and develop to internalize new technologies on enforcing contracts externalities when the markets and institutions that underlie exchange. gains of internalization, in by introducing the In other words, They are the main, results from concept of transaction the costs of capturing changes in economic costs. the gains from market values, changes which exchange. stem from the development of new technology and the opening of new markets, changes to which old property rights are poorly attuned.
2.What explains when outsiders seek to become insiders? (Outsiders can becomeinsiders either by joining an existing economic union or by creating their own regional group )timing of the desicion by outsiders countries to seek integration Externalities,transaction costs, and demand for integration. Demand for integration on the part of big business does not automatically translate into success. If demand is not met by supply, no change will occur.As new technologies increase the scope of markets beyond the boundaries of a single state, actors who stand to gainfrom wider markets will seek to change and existing governance structure in order to realize these gains to the fullest extend. What are the potential gains from wider markets? 1. Larger markets help firms achieve economies of scale in production. That is, an increase in production lowers the avarage cost of output per unit. 2. Trade is beneficial because it permits countries to exploit their comparative advantage. A comparative advantage arises when the marginal opportunitycost of producing one good in terms of another good differ between countries. 3. In addition to these gains from trade, there are specific gains to be had from investing abroad. Investment abroad bring several advantages for firms. Inclueding several risks too. - Uncertainty - Unexpected price hikes, Poor quality goods, tariff change, differing rates of inflation, - A host country can revert to outright nationalization of foreign asset. DEMAND FOR INTEGRATION ON THE PART OF BIG BUSINESS DOES NOT AUTOMATICLY TRANSLATE INTO SUCCESS . IF DEMAND IS NOT MET BY SUPPLY, NO CHANGE WİLL OCCUR.
2.What explains when outsiders seek to become insiders? (Outsiders can becomeinsiders either by joining an existing economic union or by creating their own regional group )timing of the desicion by outsiders countries to seek integration The supply of integration. Supply conditions are the conditions under which political leaders are willing and able to accommodate demands for functional integration. Willingness depends greatly on the payoff integration to political leaders. Why sacrifice national sovereignty and pay the price of membership in a regional group if the economy is growing relatively fast and voters are thus content? Willengness brought about by economic difficulties, however, is no guarantee of successful integration. Willing leaders may still find it impossible to supply integration because of collective action problems.
The collective action problem is that neither state can choose its best policy without knowing what the other intends to do, but there is no obvious point at which to coordinate. TWO TYPES OF COLLECTIVE – ACTION DILEMMA Prisoner’s Dilemma* Coordination Games** y1 y2 R L x1 3/3 1/4 R 1,1 -1,-1 Strategy Drivers x2 4/1 2/2 L -1,-1 1,1 This game is the standart representation of Theproblem in PD is that in pursuing its self- externalities interest, each state imposes cost on the other where in the pursuit of their own private gains independent of the other’s policy, whereas in actors impose costs on each other the coordination game each imposes costs or independently of each other’s action. benefits on the other contingent upon the other’s policy.* Duncan Snidal Arthur Stein ** Y. Varoufakis
CREATION OF ORIGINAL UNION Demand and supply Demand and supply condition are met condition are not met Success Failure Perceptible negative No perceptible external effect on negative external outsiders effects on outsiders No external effectWillingness to pay Unwillingness to paymembership price; membership price;and union accepts Or rejected by unionnew members No integrative First integrative Second integrative No integrative response response; joining response; creation response of union of counter-union -A union may no interest -price of membership highly cost Demand and supply Demand and supply condition are met condition are not met Success Failure
The prisoners dilemma was originally formulated by mathematicianAlbert W. Tucker and has since become the classic example of a"non-zero sum" game in economics, political science, evolutionarybiology, and of course game theory.A "zero sum" game is simply a win-lose game such as tic-tac-toe.For every winner, theres a loser. If I win, you lose. Non-zero sumgames allow for cooperation. There are moves that benefit bothplayers, and this is what makes these games interesting.
In the prisoners dilemma, you and Albert are picked up by thepolice and interrogated in separate cells without a chance tocommunicate with each other. For the purpose of this game, itmakes no difference whether or not you or Albert actuallycommitted the crime. You are both told the same thing:If you both confess, you will both get four years in prison.If neither of you confesses, the police will be able to pin part ofthe crime on you, and youll both get two years.If one of you confesses but the other doesnt, the confessor willmake a deal with the police and will go free while the other onegoes to jail for five years.
At first glance the correct strategy appears obvious. Nomatter what Albert does, youll be better off "defecting"(confessing). Maddeningly, Albert realizes this as well, soyou both end up getting four years. Ironically, if you hadboth "cooperated" (refused to confess), you would bothbe much better off.And so the game becomes much more complicated than itfirst appeared. If you play repeatedly, the goal is to figureout Alberts strategy and use it to minimize your total jailtime. Albert will be doing the same. Remember, the objectof the game is not to screw Albert over. The object is tominimize your jail time. If this means ruthlessly exploitingAlberts generosity, then do so. If this means helpingAlbert out by cooperating, then do so.
To make this game more fun, Ive given Albert several differentstrategies that were inspired by a chapter in Carl Sagans book,Billions And Billions:The Golden Rule - "Do unto* others as you would have them dounto you." Albert always cooperates (doesnt confess). Its quiteeasy to take advantage of this innocent "turn the cheek" strategy.The Brazen Rule - "Do unto others as they do unto you." Albertbegins with a cautious defection (he confesses), but after that hedoes whatever you did last. A similar strategy which begins withcooperation is usually called "tit-for-tat."The Brazen Rule 3 - Almost the same as the Brazen Rule. Theexception is that Albert is a little more forgiving. If you defect(confess), Albert will forgive you about once every three times andcooperate the next time anyway.* ..e, ye kadar
The Iron Rule - "Do unto others as you wish, before they do itunto you." Albert always defects. Both of you tend toaccumulate a large prison sentence.??? - Albert decides randomly which of the above fourstrategies to use, and you have to figure out for yourself whichone hes chosen. Albert does not randomly choose "confess" or"dont confess." Instead, he randomly chooses one of the abovestrategies and sticks with that one strategy until you change hisstrategy to something else.