Article
Publication Date
February 2011
Journal/Book Title/Conference
Politics & Policy
Volume
39
Issue
1
Abstract
This article assesses the current and future levels of North American integration. Econometric models that compare integration around the world indicate that integration deepens when countries have similar domestic, political, and economic institutions, and are economically asymmetrical. It is theorized that similar domestic institutions reduce transaction costs and uncertainty of success for firms while economic asymmetry provides incentives for and coordination among member states. In addition, institutional homogeneity also affects the level of integration. Currently, the North American partners lack high levels of these conditions, which explains the low level of integration. The analysis concludes with policy recommendations to improve the necessary conditions for the deepening of economic integration.