Economic integration among developed, developing and centrally planned economies: a comparative analysis.

Examines six integration schemes, and decomposes their ability to increase inter-member trade into environmental, policy, and system effects. Environmental factors caused the greatest variation in trade creation, with inter-member distance the most important environmental variable. The CACM and EFTA; have followed more effective integration policies than the EEC, LAFTA, and the Andean Pact. Although integration can thus benefit developed and developing countries alike, for some, such as those in Latin America, inter-member distances severely limit its effectiveness. While the combination of policy and system has kept the CMEA from achieving its full potential for increasing inter-member trade, its effectiveness does not differ from that of unions among market economies. -Authors