knowledge and resource based comparative advantages through integration and

Knowledge and resource based comparative advantages

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knowledge and resource based comparative advantages through integration and this however does not come effortlessly and at no cost, a lot of dedicated planning and hard work must be put in first. As we all know, one of the major problems developing countries face is the for- mulation and implementation of good macro economic policies. Consequently, these countries have experienced instability in their macroeconomic environment and thus regional integration can help them to harmonize their macro policies, including fiscal and monetary policy and to achieve a stable macroeconomic environment within the integrated economies. III. REGIONAL ECONOMIC INTEGRATION IN AFRICA 1. Attempts at Economic Integration among Developing Countries in Africa According to Salvatore (2004), the success of the European Union has encour- aged many attempts at economic integration among groups of developing nations in Africa as a means to stimulate the rate of economic development but most of these at- tempts met with only limited success or even failure. The main problem to the success- ful economic integration in African countries is the uneven distribution of benefits among members. The benefits are likely to accrue mainly to the most developed nations in the community. This leads to a withdrawal of lagging nations, causing the attempt at 7 From: Africa in the World Economy-The National, Regional and International Challenges FONDAD, The Hague, December 2005, .
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The Benefits of Regional Economic Integration for Developing Countries in Africa 77 economic integration to fail. This is one of the reasons that caused the former East Afri- can Community to collapse in 1977. 8 According to Salvatore (2004), one way to avoid this problem is to provide investment support through industrial planning by assigning some industries to each Partner States in relation to their comparative advantage. Another difficulty is that many of the developing nations in Africa are not will- ing to give up part of their sovereignty to a supranational community body, as is re- quired for successful economic integration (Salvatore, 2004). For example, during the integration process of the EU, member states agreed to set up a supranational body which is independent from the government of the member states. As pointed out earlier, this is one of the requirements for effective economic integration. Due to the fear of loosing their sovereignty, most of economic communities in Africa are intergovernmen- tal institutions. Other difficulties are due to poor transportation and communication sys- tems among the member states, often the greatest distance separating members, and the basically complementary nature of their economies and competition among themselves for agricultural export in the global market (Salvatore, 2004). The problems mentioned above, combined with others therefore limit the benefits of regional economic integra- tion to the participating member countries and mostly to the developing countries in Africa.
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  • Spring '16
  • amilcar bulnes
  • International Trade, regional economic integration, economic integration

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