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The purpose of this essay is to introduce and evaluate recent scholarship (for
example, Lake and Morgan 1997; Mansfield and Milner 1997; Scott 1998; Solingen
1998; Baldwin et al. 1999; Hettne, Inotai, and Sunkel 1999; Hook and Kearns
1999; Mattli 1999; Page 2000) examining security and functional regions,
juxtaposing these two types of regions and exploring the impact of recent
methodological debates on our understanding of regionalism. Of particular interest
is whether there exists in the field of international relations one logic or two with
regard to regionalism, that is, whether geopolitics and capitalism are conflated or
are both autonomous parts of this area of inquiry (see also Thompson 1983; ChaseDunn 1989). Using the literature on regions and regionalism, this essay will argue
that these two logics are analytically separable but empirically intertwined.
Defining Regions
With the end of the Cold War and the trend toward economic globalization as well
as the increasing complexity of international relations, the concept region risks
becoming an empty idea. These forces have redefined the structural and agentive
relationships between the global, regional, and national contexts. Moreover, they
are leading us to re-examine the theoretical foundations of the study of
regionalism. Our regional images are often based on unexamined and outdated
metageographical conceptions of the worldFa perspective dubbed the jigsawpuzzle view that assumes discrete, sharply bounded, static continental units fit
together in an unambiguous way. Yet, the world is not structured in such a neat
manner; to the contrary, regions disappear and reappear as they are transformed
by various economic, political, and cultural factors (Levis and Wigen 1997).
r 2003 International Studies Review.
Published by Blackwell Publishing, 350 Main Street, Malden, MA 02148, USA, and 9600 Garsington Road, Oxford OX4 2DQ, UK.
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Key Distinctions
Often those engaged in defining the concept region are content to list physical,
political, and economic criteria without embarking on theory development. For
example, Edward Mansfield and Helen Milner (1997) emphasize geographical
proximity and specificity as the key defining traits of a region. Or, researchers refer
to early conceptual analyses (for example, Thompson 1973) and essentially leave
the concept undefined. Scholars in history and political science seem to think that
they will know a region when they see one. For economists, the choice is even easier,
region is coextensive with a preferential trading agreement or a customs union.
Thus, L. Alan Winters (1999:8) discusses in detail the concept of multilateralism but
takes its counterpart, regionalism, almost for granted. For him, it refers to any
policy designed to reduce trade barriers between a subset of countries, regardless of
whether those countries are actually contiguous or even close to each other.
These are inadequate solutions to the definitional problem because both the
character and functions of regions have recently experienced a major transformation. One change has occurred in the relative weights given various levels of
analysisFglobal, regional, nationalFand the links between them. During the Cold
War, most regions were either political or mercantile clusters of neighboring
countries that had a place in the larger international system. Occasionally, political
and military motives fostered the establishment of superregions such as the North
Atlantic Treaty Organization (NATO) and the Organization of African Unity (OAU).
However, since the late 1980s, subregional and microregional organizations have
become more common, for example, the Baltic Council of Ministers, the Visegrad
Group, the Shanghai Group, and Mercosur. This trend is, in part, a response to the
fragmentation of great-power blocs, especially in Eastern Europe and Central Asia,
but it also reflects the need to react to the pressures created by economic
globalization through local means.
A second change is the growing differentiation between physical (geographical
and strategic) regions and functional (economic, environmental, and cultural)
regions. This transformation appears linked to the first change. The increasing
emphasis on the globalregional relationship has led to paying more attention to
functional and subregional relations, even though the nationregion nexus is still
predominantly viewed in physical and state-centric terms.
The study of regionalism is also undergoing a methodological renewal that is
manifested in the new divide between rationalist and constructivist research
agendas regarding the processes of region formation. In the past, regions were
often delineated and compared in time and space inductively by using data on the
economic and institutional ties between states (for example, Russett 1967;
OLoughlin and van der Wusten 1990). Currently, most trade economists take
regions as institutionally grantedFfor example, the European Union (EU), North
American Free Trade Agreement (NAFTA), and MercosurFusing them to study
changes in the shares of intra- and interregional trade (for example, Frankel 1997,
1998). As a result, the economic approach provides reasons for the debates between
regionalists and multilateralists, but the arguments do not necessarily contribute to
the study of the dynamics of economic regionalization except in tracing changes in
trade shares. Thus, for example, Jeffrey Frankel (1997) found in 1994 that regional
trade concentration ratios were the highest in Mercosur and the Andean
Community followed by ASEAN, NAFTA, and the EU, whereas a comprehensive
assessment of the depth of integration in these various regions based on nine
different indicators showed that the European Union was in the lead followed by
Mercosur (Page 2000).
In contrast to this more material delineation of regions, the constructivist
approach stresses how regions arise from the redefinition of norms and identities
by governments, civic groups, and business firms. The use of common cultural
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identities to define regions grew out of the process of decolonization, which was
observed to lead to the construction of culture blocs (Meinig 1956). By social
construction of regions is meant that regions are shaped by the collective
perception of identities and meanings with blurred and ever shifting boundaries.
This view rejects the static conception of regions and considers them changing
cognitive structures cemented by common institutional and economic ties (see
also Murphy 1991; Adler 1997). Constructivism stresses the instrumental uses
of regionalism to promote specific political and economic ends. To constructivists,
actors create social facts by assigning functions to various spatial units. These
functions are never intrinsic; they are assigned relative to the interests of users
and observers (Searle 1995:19). Functions assigned to social facts can be
either agentive or non-agentive; the former serve the intentions of actors, but the
latter happen independently. Obviously, the physical location of a region is
non-agentive; the establishment of a regional military alliance has an agentive
function.
In the study of regions, then, the key dimensions center around the division of
the world by levels of analysis and by the physicalfunctional distinction. Physical
regions refer to territorial, military, and economic spaces controlled primarily by
states, but functional regions are defined by nonterritorial factors such as culture
and the market that are often the purview of nonstate actors. For instance, an ethnic
group may want to create a cultural region and use it agentively to promote an
independent political community. In the global system, economic regions are
constructed by transnational capitalist processes, environmental regions by the
interplay between human actions and the biosphere, and cultural regions by
identity communities.
The distinction between physical and functional regions is reminiscent of Manuel
Castells (1996) differentiation between a space of places and a space of flows.
He defined a place as a locale whose form, function, and meaning are selfcontained within the boundaries of physical contiguity (Castells 1996:423). Places
are historically rooted yet reshaped increasingly by the flows of information and
people. The space of flows refers to the material organization of the time-sharing
social practices that work through flows and networks (Castells 1996:412).
Networks have their own hubs of power and managerial elites who, even though
spatially located, organize the space of flows independently of physical contiguity.
In international relations, the study of physical regions has been predicated on
the notion of anarchy, which leads sovereign states to work to control specific
territories and to form regional security complexes. As a result, regions are defined
as spatial clusters of states that the logic of anarchy has facilitated, positively or
negatively, becoming dependent on each other. In contrast, the study of functional
regions does not need the assumption of anarchy. The driving force in functional
regions is either the economy (for example, production networks), the environment (for example, acid rain), or culture (for example, identity communities).
Whereas physical definitions of regions are usually provided by states in an attempt
to reaffirm their boundaries and to organize into territorially exclusive groups,
functional conceptualizations of regions emanate from the interplay of subnational
and transnational economic, environmental, and cultural processes that the states
are only partially able to control. Thus, the control of places and the control of flows
require different ideas and instruments depending on which definition of region
one employs.
A number of scholars (for example, Agnew and Corbridge 1995; Newman 1999)
have tried to link the physical and functional conceptions of regions by focusing on
the boundary-eroding consequences of globalization and identity formation and
the extraterritorial challenges to sovereignty that these forces unleash. They
suggest that physical and functional definitions of regions may be viewed as a
sequence in which territory gradually gives way to space. Indeed, the transition
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Russia while at the same time bringing about a realignment with the United States
that has reduced the autonomy of the Eurasian political space, especially in the
Caucasus and Central Asia (Stent and Shevtshova 2002/2003).
In the post-Cold War international system, even though there has been an
increasing demand for external intervention and crisis management for humanitarian and other political reasons, neither the United States nor any other major
power has shown a willingness to shoulder the full responsibility for managing
these regional crises. As a solution to this dilemma, some have suggested the
establishment of a concert of powers to replace global hegemony (which is thought
to be unattainable) and a balance-of-power system (which is considered unstable).
Indeed, a central theme of David Lake and Patrick Morgans (1997) edited book
Regional Orders is the advocacy of regional concerts and the assessment of their
feasibility.
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from its agenda. This perspective may be too narrow because a concert can also be
set up to manage a particular security problem and to avoid unilateral interventions
that would only lead to a deterioration in the situation. Bosnia and Kosovo show
how regional instability can call for coercive intervention by a central concert
without creating a robust regional concert. In fact, the economic resources of the
core statesFin this case the European UnionFmay be a necessary incentive to gain
local cooperation.
Scholars writing about specific regions also differ in their conclusions regarding
the feasibility and effectiveness of regional concerts. With regard to Latin America,
for instance, David Mares (1997) argues that the best alternative is the stabilization
of the old balance-of-power system with continuing, but possibly less hegemonic,
involvement by the United States. This advice is questioned by Andrew Hurrell
(1995, 1998) who claims that a security community, although loosely knit and
bounded, is emerging between the two old rivals Argentina and Brazil and
eliminating their old balance-of-power competition. He notes, though, the
ambiguities in Brazilian policy and its refusal to commit itself to a deeper
cooperation in the hemisphere that is made even more difficult by the economic
crisis in both countries.
The rejection of the nuclear-weapons option by Argentina and Brazil, their
mutual confidence-building measures, and the establishment of Mercosur (Mercado
Comun del Sur) have created an impression of new regionalism in the Southern
Cone of Latin America. And Mercosur has, indeed, sparked a major surge in
intraregional trade but without diversifying trade significantly with external
partners. Moreover, although increasing, intra-Mercosur trade has been growing
primarily in the less dynamic sectors and has not led to a change in its role in the
international division of labor (Cammack 1999; Roett 1999). Since 1998, the region
has been experiencing a major economic crisis. As a result of the 35 percent
devaluation of the Brazilian real in that year, trade relations with Argentina have
stagnated and companies have begun moving their businesses to Brazil. Since the
deterioration of the Argentinian economy in 20012002, the pressures within that
country have also been increasing, but even so Mercosur seems to be able to
muddle through (Phillips 2001).
If Latin America does not have a robust regional concert, how about other
regions? David Pervin (1997) has argued that the Middle East does not have a
concert but rather a superficial balance-of-power system. Some (for example, Aarts
1999) have even asked whether there is any regionalism at all in the Middle East. In
the last couple years, it has become clear that unilateralism rather than concert
behavior is the main rule in this area of the world. However, the recent
establishment of the Quad composed of the United States, Russia, the European
Union, and the United Nations to promote a peaceful solution to the IsraeliPalestinian problem suggests that having a central concert may be one of the few
viable alternatives to managing conflict in an unruly region.
In the Asia-Pacific region, the balance-of-power system has seldom been
considered a viable option. Instead, a regional concert of powerFcomprising the
United States, China, Japan, and RussiaFhas been offered as an alternative (Shirk
1997). Today, there are signs of the emergence of such a concert in the effort to
collectively pressure North Korea to give up the nuclear-weapons option. The
absence, however, of a shared ideology in this region has been viewed as an obstacle
to building such a concert. Behavior in the region is preeminently political,
focused on building trust and shared understandings, and, in the process, shaping
the normative context of the metaregime rather than on the immediate regulation
of state behavior through specific regimes (Alagappa 1998:643). With regard to
Africa, both the internal politics of the states and their mutual relations are too
fragmented to make it meaningful to speak of a regional concert, although the
competitive bargaining between South Africa, Nigeria, and Senegal in the
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strategy for building this security order. In NATO and the European Union, the
enlargement process started by various thin arrangements of military and economic
cooperation with the accession states. These arrangements were then gradually and
selectively converted into thicker forms of integration and, ultimately, will evolve
into full membership for these countries. In the course of this process, a major goal
was to maintain a balance between the costs and benefits of enlargement, which has
often militated against the wishes of new members to join the organization without
delay (see also Croft et al. 1999; Mannin 1999; Sandler and Harley 1999). In
contrast, consider how the Organization for Security and Cooperation (OSCE) and
the Council of Europe enlarged. In their case, new members came on board and
immediately had to assume essentially the same political and legal obligations as
older members.
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these two categories can lead to an antagonistic impression that the West is global
and the East regional.
The relationship between globalization and regionalization has been extensively
studied and debated by mainstream economists. The basic question underlying this
research and current debates is stated well by Bhagwati (1991, 1992) when he asks:
Were the preferential free trade areas and customs unions belonging to the second
regionalism of the 1980s building blocs or stumbling blocs for the multilateral
economic order? In his view, due to the dominating effects of trade diversion,
regionalism became a stumbling bloc, slowing down progress toward multilateralism. In contrast to the advocates of regionalism, Bhagwati and others (for
example, Krueger 1999; Panagiriya 1999) do not seem to believe that globalization
as such elicits regional responses; they start from a regional perspective and
explore its effects on the global trading system.
The possibility that regional trading arrangements block multilateral free trade
should receive a fair hearing. In particular, political economy models observe that
due to the prevalence of vested interests and lobbying, regionalism is often
accompanied by protectionism and trade diversion that may lock the participants
into closed economic blocs. Moreover, effective regionalism is a policy pursued by
strong powers, but the weak ones are sidelined in all ways in the global trading
system (Pelagidis and Papasotiriou 2002). A review of this literature (Frankel
1997:216) concludes that there is no shortage of models and arguments in which
regional trading arrangements can undermine multilateral liberalization. The
expectation of trade diversion at the expense of trade creationFand, thus, gains
for special interestsFincreases the likelihood of concluding a preferential trading
agreement (Grossmann and Helpman 1995).
In contrast, there is also abundant evidence that regional arrangements are
compatible with, or even pave the way for, multilateral trade liberalization. Regional
preferences can strengthen export constituencies, provide insurance against
failures, lock in unilateral liberalization, and encourage competitive liberalization.
Within regions, industries in which export-oriented firms dominate have a greater
interest in achieving returns to scale and in promoting regional and international
liberalization of trade (Busch and Milner 1994; Milner 1997). Although the actual
picture is always complex and mixed, on balance there appears to be support for
the contention that regional and global trading arrangements are compatible with
one another (Oye 1992; Frankel 1997; Ethier 1998).
Moreover, this benign interpretation of preferential trading agreements receives
confirmation in empirical studies of international trade flows. Obviously, some
regional arrangements are more open than others and trends among industries
and regions vary. And, in some cases, trade within regions has expanded more
quickly than between them. But there is little evidence that the world economy is
devolving into exclusive regional blocs and, even less, into permanent trade wars.
To the contrary, both intra- and interregional trade seem to be expanding
simultaneously without undermining each other (Milner 1994; OLoughlin and
Anselin 1996; Frankel and Wei 1998).
Economists arguing about the relationship between regional and multilateral
trading arrangements invariably take regionalism as their point of departure and
assess whether regionalism is closed or open. Irrespective of the empirical
conclusion, their normative stance is usually that closed regionalism is malign;
instead, they propose that we should be interested in trade-creating building blocks
for a liberal world order (for example, Hormats 1994). It is intriguing that
economists seldom ask how economic globalization might potentially shape the
process of regionalization, the question of major concern for political scientists.
One of the few exceptions is Robert Lawrence (1996) who argues that economic
globalization does, in fact, demand deeper regional integration. He rejects the
traditional view that foreign direct investment (FDI) and trade are substitutes for
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each other. Instead, Lawrence observes the growing role of FDI and the need it
creates to restructure, specialize, and engage in network production. The
expansion of FDI has led to regional production and service clusters intended to
improve efficiency and reduce transaction costs. Due to the globalization of FDI,
regional integration has become progressively deeper and moved beyond
preferential trading arrangements.
PoliticalMilitary Regions
Given our discussion to this point concerning globalregional security linkages,
especially from the viewpoint of concert theory, it is possible to conclude not only
that this linkage is relatively weak but that the theory itself is conceptually muddled
and empirically of limited value. Therefore, alternative formulations are needed to
create a proper spatial context for security theories. This task seems all the more
important because defining region and regionalism using the concepts of
traditional security theories does not appear to be of much help. NeorealismFwith
its focus on anarchy, risks of defection, and relative gainsFdoes not take spatial
dimensions seriously. The same applies to neoliberal institutionalism in which
spatial concepts find hardly any place at all. Instead, institutions are treated almost
exclusively as analytical and nonspatial phenomena (for example, Baldwin 1993;
Haftendorn, Keohane, and Wallander 1999). Only in discussions of offensive
realism do we find strong geopolitical undertones as a result of its concentration
on great-power competition (Mearsheimer 2001).
Externalities
The problematic status of regionalism in mainstream international relations
theories may explain why their supporters introduce the spatial dimension only
indirectly by using general concepts such as externalities. An illustrative externality
is the concept regional security complex, defined as a group of states whose
primary security concerns link sufficiently closely that their national securities
cannot realistically be considered apart from one another (Buzan 1991:190).
These complexes are kept together by the negative or positive security links
between states.
Lake and Morgan (1997) use the regional security complex as their basic unit of
analysis. Indeed, these scholars have picked a specific aspect of the complex to
study, namely, regional order, which they view as the mode of conflict
management within the regional security complex (Lake and Morgan 1997:11).
These orders can produce security in different ways: by integration, pluralistic
security communities, collective security, a great-power concert, or power
politics. Moreover, regional orders contain different mixes of cooperation and
conflict and varying degrees of external penetration. And there is a certain
hierarchy among the security orders; they are rungs on a ladder up which
regional security complexes may climb as they pursue security management
(Morgan 1997:16).
Lake and Morgans state-centric approach is reflected in their definition of
region, which they argue is held together by negative and positive security links
between states. The amount and strength of the links can be used to define the
territorial domain of the region. Lake (1997) has made a theoretical attempt to
develop an institutional conception of region by building on positive and negative
externalities that are primarily nonspatial (but based on state-centric premises). As a
result, he conceives of a regional system as a set of states affected by at least one
transborder but local externality that emanates from a particular geographical
area (Lake 1997:48). As externalities are usually reciprocal, the mutual imposition
of this set of states upon each other creates an externality that binds the relevant
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compare them with the costs of membership when these externalities are supposed
to be internalized?
Domestic Coalitions
The theory of externalities can also be used to tap nonrational approaches to the
study of regionalism. Take, for example, Etel Solingens (1997, 1998) writings that
emphasize the importance of domestic coalitions and the grand strategies that they
pursue vis-a`-vis other states. In this way, she helps us break out of the state-centric
framework in which much of the study of regionalism has found itself confined.
Solingen distinguishes between liberalinternationalist and statistnationalist
coalitions; the former prefer economic cooperation and political accommodation,
and the latter seek economic protection and political conflict. As a result, the
structure of the regional order can be liberal (Western Europe), nationalist (Middle
East), or mixed (Southern Cone of Latin America).
Solingens coalitional approach is compatible with Lakes (1997) theory of
regionalism because the impact of coalitions on national strategies (inside-out
effects) can be considered externalities that create costs or opportunities for other
states. The way in which these externalities are received and reacted to by other
countries depends, according to both theories, on the nature of the dominant
coalition. The coalitional approach to regionalism permits a dynamic and cognitive
conception of region because the scope of the region is thus in the eyes of
coalitional beholders, and therefore subject to continuous redefinition (Solingen
1998:4). Like the theory of externalities, the coalitional approach stresses the
importance of the second image, that is, the effects of domestic structures and
policies on states foreign policy. However, the penchant in externality theory to use
a state-centric model does not facilitate the specification of relevant domestic factors
resulting in statements such as regional systems comprise local externalities that
radiate outward from a distinct geographic focus (Lake 1997:50).
In some ways, then, Solingens coalitional approach is superior to a state-centric
analysis because it permits not only differentiation among states but also
exploration of the effects of external factors on domestic structures and policies.
The strength of statistnationalist and liberalinternationalist coalitions obviously
hinges on the regional contextFwhether conditions are generally cooperative or
conflictualFand on the distributional effects of participation in the world market.
In other words, liberalinternationalist domestic coalitions have greater difficulty in
reaching their goals in a nonpermissive regional environment, but statist
nationalist coalitions have to readjust their goals in a liberal environment. The
relationship between domestic coalitions and region formation is, thus, a two-way
street.
Management of distributive effects appears to depend on whether the openness
of the economy is repeatedly correlated with domestic economic growth on the one
hand and wage inequality and interregional income differences on the other. In this
respect, recent evidence does not provide for any simple conclusions. Globalization
and regional integration have their economic blessings but they cannot be taken for
granted. Liberalization of national economies probably accelerates economic
growth, yet it can also lead to increased wage disparities and make unskilled labor
more substitutable (Rodrik 1999; Wood 1999, 2002). In addition, the nature of the
relationship between liberalization and the spatial distribution of economic activities
remains a largely unsolved puzzle. Perhaps the one sure thing we can say is that the
opening up of national economies results in greater specialization that may involve
both decentralizing and centralizing processes (Rodriguez-Pose 1998; Fujita,
Krugman, and Venables 1999; Venables 1999).
In sum, Solingen (1998) defines region in terms of the interaction between
regional (and global) contexts and the grand strategies of domestic coalitions. Her
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emphasis on the globalregional nexus differs from that of other scholars writing
on this issue (for example, Hettne 1999; Mittelman 2001) in that she rates the
impact of domestic factors as pivotal. Moreover, she does not pay any systematic
attention to the economic redistribution that may result from the choice of specific
coalitions and grand strategies (though, to be fair, she addresses the problem in the
case of Brazil). Perhaps the time has come to try to synthesize economic research on
the intranational consequences of liberalization and political science literature on
domestic coalitions and their regional strategies regarding cooperation and rivalry.
Identity Regions
A dynamic approach to region formation is also stressed by those writing from a
constructivist approach. These authors define regions with the help of such
concepts as trust, common identities, and shared values as these are embedded in
cross-border networks. Such imagined or cognitive regionsFoften produced by
the spread of liberal values and interestsFare delineated by nonphysical markers.
The existence of a cognitive region does not necessarily require that its members
occupy a common space for it can be formed through nonspatial interactions. A
major type of cognitive region is the security community whose members expect
change to occur peacefully and disputes to be resolved nonviolently (Murphy 1991;
Adler 1997; Adler and Barnett 1998).
Identity regions exist in the consciousness of people. They must have historical
and contemporary symbols that the people inhabiting the region recognize and
share. And such regions must be institutionalized; that is, their territorial and
political symbols should have continuity and their behavior should be repeated and
standardized (see also Paasi 1986).
Eastern Central Europe has been suggested as an example of an imagined region
that has been recreated by the spread of democratic values and practices. This
process has resulted in a new spatial imaginary that differs significantly from the
Cold War era as both the political position and the identities of the region have
changed (Painter 1999). This observation, though, exaggerates both the strength of
the common identity and political commitments to this region. For instance,
historians are quick to adopt the concept of Mitteleuropa and work to justify its
ter 1999). Political and economic differences between the central and
existence (Pe
eastern parts of the region are considerable and regional organizations such as the
Central European Free Trade Area (CEFTA) have become an instrument to pursue
EU membership rather than a medium for building common identity and
cooperation (Rhodes 1999; Zukrowska 2000).
With regard to the economy, the optimum currency area is an example of a
region that is constructed by political decisions. The operation of such an area is
influenced by asymmetric economic shocks, movements of relative prices, factor
mobility, and fiscal transfers. These factors give rise to externalities that create
networks formed around spatial dependencies. The spatial element can also be
seen in the specialization in production that results from such currency unions
(Bayoumi and Eichengreen 1999; Mattli 1999; Kenen 2002).
The development of a currency area leads to both functional and territorial
regions. Territoriality becomes a part of such an area for the simple reason that its
members are states that have agreed to fix the relationship between their currencies
or create a new, common currency. The establishment of a common currency, such
as the euro, has been viewed in constructivist terms as an expression of the search
for common identity and political vision (Marcussen 1999; Risse et al. 1999).
Although the emphasis on identity and vision seems to leave little room for territory
in understanding currency unions, the fact remains that even currencies with fixed
exchange rates derive their position from connections with states. The European
Monetary Union (EMU) is an interesting test case of how far a currency union can
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implies the degrees of regionalization that have occurred in terms of, for example,
spatiality, cooperation, and identity. Katzenstein (1996, 1997) appears to entertain a
similar idea when he compares the regionness of Western Europe and East Asia. He
finds in the former system regionalism that is more closed and centralized than in
the latter which is more open and decentralized due to the existence of multiple
power centers. The regionalization of the European Union relies more on formal
multilateral institutions, but in East Asia regionalization is primarily founded on
bilateral relations in politics and networking in business.
Joseph Grieco (1997, 1999) has set out to explain this difference in the
institutionalization of regional cooperation in the two places. His basic argument is
that the relative equality and stability of the distribution of capability in the
European Union has alleviated fears about the regional dominance of Germany
and, thus, has facilitated institutionalization. In East Asia, the stronger and
increasingly dominant role of Japan has had the opposite effect. Grieco proposes
that the failure to institutionalize cooperation in East Asia, despite the increase in
regional trade encapsulation, refutes institutionalfunctional theory. Despite the
growing dominance of Japan in intraregional trade relations in East Asia, no robust
institutions of integration have emerged.
What Grieco describes, however, is not necessarily the case. More advanced
measures of intraregional trade intensity show that from the 1960s to the mid1990s this indicator has declined both in East Asia and in ASEAN. In contrast to the
United States and Germany, Japans foreign trade has become more global at the
expense of its regional trade in East Asia (OLoughlin and Anselin 1996; Frankel
1998). Grieco (1999) seems to be closer to explaining what is actually happening
in stressing Japans greater economic and security dependence on the United States
as compared to Germanys. This dependence provides Washington with a lever
to influence Japans policy if the latter tries to promote either trade or monetary
groupings in which the United States is not envisaged as a member. To
this statement one should hasten to add, though, that there are deep suspicions
all over East Asia regarding any Japanese plans to strengthen its position in the
region.
Another implication of regionness is that regions do not need fixed boundaries.
Regional clusters of actors can be defined by their mutual externalities, common
identities, or the interactions among domestic coalitions. Boundaries are in constant
flux, especially in mixed-actor regions. But even state-based regions expand and
contract. Thus, after attaining their independence, the Baltic countries quickly
became membersFin terms of institutions and identitiesFof a larger Nordic
Baltic region. They have also systematically, and successfully, aspired to join NATO,
the transatlantic framework whose territorial boundaries have expanded and
become blurred across the past ten years.
Regions also enlarge and contract in more subtle ways. Regional organizations
disseminate their norms and institutions outside their territorial domains, creating
varying zones of conformity with them. The influence is particularly strong if
compliance with the norms is a precondition for being admitted as a member of the
regional system. For this reason, the EU and NATO enlargement processes have
created a political regime that reaches much beyond their formal domains. In
general, the degrees of regionness or intraregional density vary considerably in the
central and peripheral zones. Following Lake (1997:5455), we can say that in
Europe thicker regions are nested within thinner regions. The latter regions
are more volatile and, therefore, provide a challenge to the stability of the core
region.
The boundaries of different economic and political zones do not necessarily
follow national borders; they may even cut across individual states. Consider
Western Estonia and Western Ukraine, for instance; they are much more closely
integrated with the core regions of Europe than are the eastern parts of these
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to relax investment rules, liberalize financial services, and make other concessions
to US capital (see also Gonzalez and Haggard 1998).
The story of NAFTA also helps us specify the role of the business community in
its relations with political leaders. United States business was divided into factions
regarding NAFTA, interested in either protecting their own markets or opening up
Mexican markets; indeed, they were so divided that they were only an effective
lobby during the ratification process. Political leaders took the initiative on NAFTA;
its advocacy remained largely in the hands of the White House given the reluctance
of business to wrestle with NAFTAs opponents. Moreover, success in the
negotiation and ratification process required things only the US government could
deliver: prior commitments, the process of convergence, and side-agreements
(Mayer 1998; Milner 1998; Cameron and Tomlin 2000). In Mexico, financial crises
allowed the reform-minded political elite to start restructuring the economy in
phases. Had all the reforms been packaged into one, resistance by entrenched
economic interests would probably have blocked the changes. The phased
liberalization of the economy created a new export-oriented economic elite willing
to support NAFTA (Tornell and Equivel 1997).
In addition to global market actors, there are also other transboundary
operations that are creating new types of informal regional networks. Such
networks often involve illegal transactions in products and commodities traded
across borders. These informal economic spaces are not apolitical; to the contrary,
organized crime, drug dealers, terrorist groups, clan leaders, and warlords use
these informal trading relations for their own political purposes (Griffiths 1996;
Bach 1999; Reno 2000). Shadow regionalism differs from both state-directed and
market-driven regional relations; it is based on a network of private contracts and
nonmarket transactions.
Functional Regionalism
Social Spaces
The social definition of region focuses on functional exchanges as the source of
spatiality and can be traced back to Jean Gottmans (1952) distinction between
iconography and circulation, between places and flows to use todays
terminology. Another major contributor to the definition of spatiality was Robert
Sack (1981:5) who distinguished between territoriality used to control a spatial
political organization and nonterritorial action; he considered territoriality as the
attempt to affect, influence, or [have] control over a specific area. Later on, Sack
(1983) realized that territory is usually contested and started to stress the
importance of access to it. The distribution of territorial power is rarely equitable
because actors have different abilities to control and enter a particular territory.
With this in mind, Sack (1983:56; see also Vayrynen 1993) redefined territoriality as
a strategy to establish differential access to people, things, and relationships.
The creation of resources by social interactions, exchange, and circulation
underlines the importance of considering social units as more than merely
containers of power. Criticizing the notion of autonomous and well-bounded
states, Charles Tilly (1998:404, 410) has explored communities that comprise both
multiple states and powerful non-state actors, defining these communities as all
categorically bounded networks in which a substantial proportion of relations fall
into triads. In making this criticism, he relies on the idea that multiple actors, both
state and nonstate ones, are linked to each other by partially overlapping triads
rather than through bilateral or hierarchical relations and in a manner so that these
bounded networks can be separated from the environment. Tillys (1998:408) basic
idea is that triads form trans-state communities, which, if favorable, contribute to
peace and the emergence of security communities.
RAIMO VYRYNEN
43
Economic Regions
Economic regionalization appears to depend on both political decisions at the
regional level and the locational decisions made by firms. In effect, regions are
viewed as an appropriate unit in which to organize governance and stimulate
political participation. But often, as in the European Union, regional governance
has remained weak. In fact, its regional dimension has been more manifest in the
rise of economic pivot regions and of capital- and technology-intensive cities that
support local development. There is evidence to suggest that, at least in Europe,
differences in regional growth rates have depended on a combination of local
conditions and their linkages to the world economy (Le Gales and Lequesne 1998;
Rodriguez-Pose 1998; Braunerhjelm et al. 2000; Newman 2000). Neither the state
nor regional government alone can assure regional success that is based on the
interrelationship among local resources, transnational capital, and publicprivate
interactions. Loose policy initiatives and regional networks cannot save a regional
project if its market incentives are inadequate (Cowling and Sugden 1999; Koch
and Fuchs 2000).
Regional specialization and growth are due both to expanding trade and
investment as well as endogenous factors. Decreasing transaction costs play a role in
the relocation of production within and between countries. The result is a center
periphery division that changes as development spurts integrate new regions into
the center. Due to backward and forward linkages, production tends to
agglomerate to areas where there is already similar production, irrespective of
the intensity of trade relations (Fujita, Krugman, and Venables 1999; Venables
1999).
In Regions and the World Economy, Allen Scott (1998:25) traces the historical
interaction of state formation and capitalism and notes that the continual
expansionary thrust of capitalism over the very long run makes it extremely
mutable in geographic terms. It may, as a result, break out in quite different
contexts. Thus, capitalism does not have any single locus, but, much like
Foucauldian power, is everywhere. National economies are composed of regional
production complexes that are connected to one another within and across national
borders, facilitating the clustering of economic activities and adding to the global
44
Conclusions
The primary purpose of this essay has been to argue that major political and
economic changes have altered the relationships among various layers of the
international system and that these changes have had different effects in the
politicalmilitary and functional spheres. With the shrinking of the state, the
national level has lost some of its influence, which in turn has fostered new links
between the global and regional levels on the one hand and between them and the
local level on the other hand. In other words, international relations are in the
process of undergoing a vertical reorganization in which the emphasis is shifting
both upward and downward from the national level. The reorganization is evident,
for instance, in the role that business pressures from below play in the formation of
regional economic associations. This change has had a particular impact in the
functional sphere where the organizing power of the state is diminishing and that of
the global market and local initiatives is growing.
At the same time, we are also seeing a horizontal reorganization taking place in
international relations as various subnational and regional units develop networks
that cross territorial boundaries. This process lies at the heart of the constructivist
view of the world in which regional processes are assigned functions such as
insuring the political coherence of the region and the resistance to globalization
(new regionalism). The theory of externalities is not constructivist in nature, but it
hints at the same dynamics; regionness is strengthened by the inside-out effects of
political, economic, environmental, and cultural processes that move boundaries of
regions through spillovers and emulation. These images of regions emphasize
flexibility and dynamism, but the traditional state-centric security perspective has
favored a fixed and static view of the region.
The marketization and fragmentation of the world system has inspired calls for
new mechanisms of political control. In the early 1990s, it was popular to suggest
that such management should be entrusted to a global or regional concert as both
hegemonic and balance of power systems had undesirable qualities. This reliance
on the concert metaphor did not turn out, however, to be a viable solution. Instead,
the concepts of hegemony and empire have returned to mainstream international
RAIMO VYRYNEN
45
relations discourse to describe the emerging world order. These trends usher in a
creative controversy between hierarchical hegemonic control and decentered
constructivism and transactionalism. In both these tendencies, it seems the
established notions of regionalism are devalued; they are either subsumed in
hegemonic structures or converted into a process in which free agents aim to
promote new political alternatives to both global capitalism and political discipline.
As a result of these vertical and horizontal transformations occurring in the
world, a growing disjuncture is emerging between the static-place character of
physical regions and the dynamic-flow character of functional regions. In the study
of regions, this disjuncture is leading scholars away from studying regionalism and
regional organizations to the analysis of regionalization and, thus, away from
examining military and political issues toward those involving society, economy, and
culture. This shift means that the regional agglomeration of technology and capital
as well as the political reconstruction of reality are becoming at least as relevant as
the multinational organization of military capabilities in regional alliances. Indeed,
these new ways of conceiving of regionalism call for a renewal in the realist and
liberal approaches.
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