Overview

  • Regional integration helps countries overcome divisions that impede the flow of goods, services, capital, people and ideas. These divisions are a constraint to economic growth, especially in developing countries. The World Bank Group helps its client countries to promote regional integration through common physical and institutional infrastructure.

    Divisions between countries created by geography, poor infrastructure and inefficient policies are an impediment to economic growth. Regional integration allows countries to overcome these costly divisions integrating goods, services and factors’ markets, thus facilitating the flow of trade, capital, energy, people and ideas.

    Regional integration can be promoted through common physical and institutional infrastructure. Specifically, regional integration requires cooperation between countries in:

    • Trade, investment and domestic regulation;
    • Transport, ICT and energy infrastructure;
    • Macroeconomic and financial policy;
    • The provision of other common public goods (e.g. shared natural resources, security, education).

    Cooperation in these areas has taken different institutional forms, with different levels of policy commitments and shared sovereignty, and has had different priorities in different world regions.

    Regional integration can lead to substantial economic gains. Regional integration allows countries to:

    • Improve market efficiency;
    • Share the costs of public goods or large infrastructure projects;
    • Decide policy cooperatively and have an anchor to reform;
    • Have a building block for global integration;
    • Reap other non-economic benefits, such as peace and security.

    However, there are risks to regional integration that need to be identified and managed.

    • Countries may have different preferences on priorities for regional integration, depending on their connectivity gaps, economic geography, or preferences for sovereignty in specific areas.
    • Regional integration’s impact on trade and investment flows, allocation of economic activity, growth, income distribution are often difficult to assess.
    • Lack of adequate complementary policies and institutions may lead to inefficient outcomes. For instance, policy barriers at the border may offset the gains transport infrastructure cooperation.
    • Regional integration creates winners and losers, notably within countries. Policies and institutions are needed to ensure that regionalism is inclusive and social, environmental, governance risks are managed. 

     

  • Working with partners (e.g. regional banks and other regional organizations and development partners), WBG country programs and global engagements inform and support regional integration. World Bank Group engagement is based on a mix of tools:

    • Analytical work – to understand effects, inform the design of policies and institutions and shape integration strategies;
    • Convening power and communications – to catalyze / support in-country and cross-border dialogue;
    • Technical assistance / advisory services – to strengthen capacity, inform projects / policy action;
    • Lending / investing – to finance (and leverage financing for) investment in infrastructure and institutions for regional integration.

     



In-Depth

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Mar 29, 2018

Belt and Road Initiative

The Belt and Road Initiative (BRI) is an ambitious effort to improve regional cooperation and connectivity on a trans-continental scale.

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May 03, 2018

Regional Trade Agreements

Deep trade agreements are increasing in number and depth. Find out why they are important to regional integration.

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Mar 29, 2018

One South Asia

The World Bank Group supports greater cooperation and regional economic integration in South Asia.

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Apr 03, 2018

Database: Content of Deep Trade Agreements

This dataset on the content of preferential trade agreements (PTAs) maps 52 provisions in 279 PTAs notified at WTO signed between 1958 and 2015.

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Dec 01, 2016

Africa - Regional integration stories from the field

The World Bank Group's Regional Integration Program in Sub-Saharan Africa allows countries to come together to address challenges of small and fragmented markets.

Additional Resources

Contact

Washington
Yanina Budkin
ybudkin@worldbank.org