A Pathway for Regional Integration

Abstract

This article seeks to explain levels of regional integration worldwide. The level of regional integration increases as the economic strength of the regional leader increases under higher levels of satisfaction among partners. The homogenization of domestic institutions also increases under these conditions. Finally, there is a reciprocal effect between integration and the homogenization of domestic institutions. Integration therefore cannot be explained using a single equation but instead requires a system of nonrecursive pathways. The article reviews prior work on regional integration and then contributes to the scholarship by synthesizing the findings of the power-centered and the institutional schools. An analysis of regional integration organizations (1970–2014), using autocorrelation-corrected regressions and structural equation model testing, supports the main hypotheses.