Regionalism is the theory or practice of coordinating social, economic or political activities

within a geographical region comprising a number of states. On an institutional level,

regionalism involves the growth of norms, rules and formal structures through which
coordination is brought about. On an affective level, it implies a realignment of political
identities and loyalties from the state to the region. The extent of regional integration may
nevertheless range from cooperation amongst sovereign states on the basis of
intergovernmentalism, to the transfer of authority from states to central decision-making
bodies, in accordance with supranationalism. What is sometimes called ‘market’
regionalism refers to the spontaneous forging of business and commercial relationships
amongst neighbouring states.
Regionalism has in the last decades become one of the forces challenging the traditional
centrality of states in international relations. Regionalism has various dimensions and takes
different forms across the world
Regionalization is often used to refer to ‘the growth of societal integration within a region
and the often-undirected processes of social and economic interaction’. It produces
interdependence as well as deepening perceptions of common interests and identity,
including self-awareness as a region. Regionalization consists of:
 Regional cooperation and
 Regional integration.
Both are distinct from each other. Cooperation and integration are not mutually exclusive
general approaches for regional governance. All regional systems, including the EU
today, contain a mixture of both.
Regional cooperation has various forms. Functional cooperation refers to limited
arrangements which are agreed between states in order to work together in particular areas,
for example, in transport, energy, or health. Economic cooperation refers to agreements
regarding commercial preferentialism, but with no harmonization of domestic rules nor any
obligation for common action in international affairs. Political cooperation entails mutual
support and commitment regarding the implementation of certain values and practices within
the countries.
Regional integration refers to processes by which states go beyond the removal of obstacles
to interaction between their countries and create a regional space subject to some distinct
common rules. Some regional integration processes are more state-led, others more market-
led.
Economic integration consists in removing economic frontiers between two or more
economies. Economic frontier is any geographical border over which actual or potential
mobility of goods, services and production factors is impaired (need not necessarily
coincide with political frontiers).
NI or negative integration denotes the removal of discrimination in national economic rules
and policies under joint surveillance (liberalization, removal of trade barriers).
PI or positive integration refers to the transfer of some powers to supranational authorities
(common policies, common institutions and harmonization of rules).
Viable integration must rely on an appropriate combination of NI and PI. Economic
integration, may lead to a new level of governance above the nation-states.
For complex and long-term regional goals (e.g. to create a full common market), states may
set up ‘commitment institutions’ for increasing the prospects of effective compliance over
time. States thus accept:
 pooling of sovereignty (i.e. the renunciation of autonomous action and/or the veto),
 delegation of powers to supranational bodies, and/or
 ‘legalization’.
This has mainly been the case in Europe.
Dynamics of Regionalism:
States decide to pursue regional integration for:
 ‘Management of independence’-- the need for newly-independent states to settle
down in their relations (1) between themselves, (2) with the former colonial power,
and (3) with other, often rival, powers. This may be summarized as the process of
consolidating international identity and ‘actorhood’, resulting in Federal union in
some cases, and regional organizations of one sort or another in others.
 ‘Management of interdependence’ -- This partly refers to economic and social
interaction, and partly to issues of peace, security and stability — either by state-led
integration or by market-led integration. Regional organizations can foster ‘security
communities’ (i.e. transnational communities in which peoples have dependable
expectations of peaceful change) by promoting cooperation, establishing norms of
behaviour, and serving as sites of socialization and learning.
 ‘Management of internationalization’—It is the interrelationship between regional
arrangements and the rest of the world and involves regional negotiations in the multi-
lateral system and shapes regional responses to globalization.
Regionalism can be seen as one level in an emerging system of global governance, but the
relationship between regionalism and multilateralism is debated in regard to both economic
liberalization and international security. The debate about the implications of regionalism
for multilateral processes of liberalization was termed the ‘building-blocks-or-stumbling-
blocks’ question by Bhagwati. Proponents of regionalism as building blocks argue that:
(1) such arrangements promote internal and international dynamics that enhance the
prospects for multilateralism; (2) regionalism can have important demonstration effects in
accustoming actors to the effects of liberalization; (3) increased numbers of regional
arrangements can weaken opposition to multilateral liberalization because each successive
arrangement reduces the value of the margin of preference; (4) regional agreements are often
more to do with strategic or political alliances than trade liberalization; and (5) regionalism
has more positive than negative political effects. Opponents of regionalism argue that: (1)
the net result of preferential agreements may be trade diversion; (2) there may be ‘attention
diversion’, with participating countries losing interest in the multilateral system, or simply an
absorption of available negotiating resources; (3) competing arrangements may lock in
incompatible regulatory structures and standards; (4) the creation of multiple legal
frameworks and dispute settlement mechanisms may weaken discipline and efficiency; and
(5) regionalism may contribute to international frictions between competing blocs.
Regionalism became increasingly attractive as rapidly expanding global capital flows
and an increasing trend towards transnational production patterns appeared to
undermine the viability of the state as an independent economic unit. Regionalism was
thus reborn as a mechanism through which states could manage the effects of
globalization.