Whither Regional Integration: The Elusive Quest for Regional Integration in Africa.
Abstract.
William Easterly’s seminal piece on the pursuit of growth has been one of the milestones that have punctuated the discuss on growth in the last couple of decades. Besides the meaningful contribution that it made to its subject, it also push forward the central theme that people (private individuals and businesses including governments) respond to incentives and the creation of the right incentives greatly increases the chances of desired outcomes to be attained. This paper seeks to build on this central theme to suggest that the much talked about results and outcome of Africa’s integration efforts for the last close to six decades is the result of misplaced incentives or the lack of them completely. While acknowledging the extent to which the difficulties to Africa’s integration have been documented, including multiple membership to regional entities, absence of political will, weak institutions and the absence of basic infrastructure, the paper goes ahead to argue these elements are just symptomatic of a more fundamental problem, that of the absence of an over-arching vision for an African integration project and the creation of the relevant incentives for the accomplishment of the same. It briefly highlights the objectives and incentives that encouraged the European and Asian integration experiences and finishes by making recommendations on how the failures of the past and challenges of the present could be transformed into suitable incentive structures to foster African integration moving into the future.
1.1 Introduction.
Early thinking on regionalism in the African continent was grounded on Pan-Africanism, in particular the imperative of the Lagos Plan of Action of 1980, and the Abuja treaty of 1991, couched mainly to promote Africa's unity and self-sufficiency (Qobo, 2007). Under the Abuja Treaty the creation of the African Economic Community was set to be accomplished over a period of 34 years (1994-2027) in six stages, ending in an economic union with a common currency, full mobility of factors of production and free trade among the continents 53 countries (UNECA 2004). This plan obviously followed the Vinerian/Balassa model of linear integration as the standard inspired by its application in the European Union context. The adaption of this model of integration helped the newly independent African countries to answer the fundamental question of how to integrate with the anticipated benefits of integration taken as given, including the advantages of larger markets, a stronger bargaining power at international fora and potential benefits of economies of scale. These governments and policy makers embraced regional integration as an important mechanism to achieve greater self-sufficiency and overcome poverty, especially in the immediate post-colonial aftermath. This believe led to a number of post-independence moves to integrate the continent through the creation of a number of institutions both at the regional and national levels. African governments have thus concluded a very large number of regional integration arrangements several of which have significant membership overlap, while characterised by ambitious targets, they have shown a dismally poor implementation record.
Hartzenberg (2011) posits that the problem of poor implementation of Africa's regional economic integration arrangements could well be due to the paradigm of linear market integration marked by stepwise integration of goods, labour and capital markets, with eventual monetary and fiscal integration suggesting that focussing on supply side constraints through a deeper integration agenda that includes services, investment, and competition policy (other than border issues like tariffs) may prove to be more effective. Motsamai and Qobo (2012) have argued that there are three interlinked factors that limit regional integration processes in Africa and constrain its potential to be used as a vehicle for development in national economies, beneficial integration into the global economy and facilitating Pan-African Unity. These are centred on: institutions of governance including the structure of domestic politics, structural conditions of poorly developed economies and their dependence on one or two primary products, as well as the capacity to assert policy preferences in international economic relations.
The evidence of poor implementation of regional integration arrangements on the African continent more than six decades after independence calls for a closer examination of the challenges of integration on the continent. This paper argues that the challenges with the processes and outcomes of the regional integration on the continent should largely be blamed on the absence of relevant incentives for African countries to take ownership and drive the integration process till the accomplishment of the desired outcome, that is, an economic union with a common currency, full mobility of factors of production and free trade among the continents 53 countries. Drawing inspiration from the European Union Integration process, the paper attempts an examination of the conditions that prevailed in Europe and the incentive structure that encouraged this integration. Arguing that European countries took ownership of their integration experience because of clear perceived benefits of integration they could immediately relate to (for example the need for peace and the disarmament of Germany Post WWII) and a vision for Europe that clearly presented the advantages of functioning as one big continent, a reality which we argue has not been the case on the African continent. The paper is divided into four sections; the section that follows briefly presents the EU integration experience with an emphasis on the incentive structure that drove EU Integration. In section 1.3 the African integration experience is briefly presented with some attempts to contrast it from what transpired in the EU. Section 1.4 brings these two experiences together to build the argument that the African Union integration experience could learn a lesson or two from the EU integration experience through the identification can creation of relevant incentives aimed at the promotion of African integration.
1.2 Overview of European Union Integration.
The European Union as it is currently configured is a political union of 27 member states that have agreed to share their sovereignty in a range of areas including through the creation of a common market (with the free movement of goods, capital and people), common internal policies on a range of sectors (including agriculture, competition, energy, environment, transport, research, employment, education, health, immigration ), a common foreign policy through the creation of the European External Action Services and a single currency shared by 17 out of the 27 member states. It also has a fairly advanced governance mechanism characterised by the sharing of competences/ responsibilities between member States countries and the European Union Commission. The EU functions through the carefully coordinated efforts of member state governments and regional institutions with specifically assigned competencies. The political system is a hybrid system combining Inter-governmental institutions with supra national institutions. The legislative role is performed by national parliaments at national level and by the European Council of Ministers and the European Parliament, whereas executive functions are performed by national governments, the Council of Ministers and by the European Commission made up of 27 commissioners.
Through more than five decades of systematic corporation, the member states of the European Union have pursued a systematic convergence of their political regimes, security arrangements and economic policies which has resulted to an integration project described by some scholars as the most advanced supranational regional arrangement the world has seen so far (Hettne,2001:22). Other scholars have argued that the growth of the European Integration was based on new policy and institutional developments that were designed to cope with new challenges. The first challenge was that of ensuring peace in a continent devastated by two world wars and this led to the creation of a common market, with agricultural and industrial policy to be managed by the council of ministers and the European Commission according to the Treaty of Rome of 1957. Then there was the development of the European Single Market with the gradual reduction and subsequent elimination of the transnational barriers through a swifter decision making process established by the Single European Act of 1986. The Act defined the Single Market as "an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of the Treaty". The single European Act also came with the institution of a more effective regional policy (a sort of social security arrangement that compensated losers from integration) to support regions that were falling behind. Though social policy was already regulated by the EEC Treaty, the Act established a Community policy of economic and social cohesion to counterbalance the effects of the completion of the internal market on the less developed Member States and to reduce development discrepancies between the regions. The Community intervened via the European Agriculture Guidance and Guarantee Fund (EAGGF) and the European Regional Development Fund (ERDF). The SEA provided for the transformation of the Common Market into a single market on 1January 1993. By creating new Community competencies and reforming the institutions the SEA opened the way to political integration and economic and monetary union to be enshrined in the Treaty of Maastricht on the European Union.
The Maastricht treaty (also known as the Treaty of the European Union) brought the three Communities (Euratom, ECSC, EEC) and institutionalised cooperation in the fields of foreign policy, defence, police and justice together under one umbrella, the European Union. The European Economic Community (EEC) was renamed, becoming the European Union, granting co-decision powers to the European Parliament and including two new pillars; an economic and monetary union and a new common area of justice and home affairs. Furthermore, this treaty put in place new Community policies (education, culture, cooperation and development) and increased the powers of the European Parliament (codecision procedure). This was followed by The treaty of Amsterdam (1997) which increased the powers of the Union by creating a Community employment policy, transferring to the communities some of the areas which were previously subject to intergovernmental cooperation in the fields of justice and home affairs, introducing measures aimed at bringing the Union closer to its citizens and enabling closer cooperation between certain Member States (enhanced cooperation). It also extended the codecision procedure and qualified majority voting and simplified and renumbered the articles of the Treaties. The treaty of Nice (2001) attempted to resolve the institutional problems linked to enlargement that was not solved under the treaty of Amsterdam (1997). It dealt with the make-up of the Commission, the weighting of votes in the Council and the extension of the areas of qualified majority voting. It simplified the rules on use of the enhanced cooperation procedure and made the judicial system more effective. The final and most recent treaty in the integration process has been the treaty of Lisbon (2007) which brought an end to the European Community, abolished the former EU architecture and made a new allocation of competencies between the EU and the Member States, modifying the way in which the European institutions function and improving the way in which decisions are made in an enlarged Union of 27Member States. The Treaty of Lisbon also reforms several of the EU’s internal and external policies. In particular, it enables the institutions to legislate and take measures in new policy areas.
Europe has therefore integrated over the years through a creative and complex process. This integration has been fuelled and encouraged by different internal dynamics within its member states and external factors sometimes associated to the forces of globalisation. Laffan (1997) argues that the launch of formal integration in Europe was in response to competitive pressures from the world economy, which resulted to an intensification of internalisation of both politics and economics in Europe and gave rise to a unique regionalism characterised by an attempt to democratise political space beyond nation states. Europe’s integration process has therefore evolved through stages during which specific challenges led to the adoption of identified solutions to work in the favour of the continent and its regionalism project. Starting from the treaty of Rome (1957) to solve the problem of conflict on the continent, through the Single Act(1986), Maastricht (1992) and Amsterdam (1997) treaties, respectively addressing issues of the competitiveness of the common market, the need for financial stability and dealing with some external problems and social challenges, to the Nice (2001) and Lisbon (2007) treaties addressing the challenges of enlargement and globalisation with the later leading to the creation of the European External Action Service. The EU’s integration experience has therefore shown a consistency around the integration being driven by identified challenges matched against the perceived benefit of collective action in the formulation of a joint response. This characteristic of European Integration bares certain similarities with the ‘needs driven’ motivation for integration in Africa but contrasts at the level of perceived benefits from collective action in the formulation of a joint response. The existence of clear perceived benefits from collective action in the formulation of a joint response provides the initial incentive framework around which a successful integration project can be built because it causes political actors and relevant stakeholders to build the resolve necessary to address the challenges that integration comes with. It can therefore be hypothesised that any region, including Africa, for whom the advantages of collective action does not supersede the perceived benefits of individual action would stutter if it goes the integration route especially if it pursues such integration solely on the basis of the promises of possible benefits. An examination of the African Union integration experience proves that this hypothesis may well not be falsified.
1.3 Overview of African Union and African Integration.
Voluntary politicaland economic regional integration have been a high priority on the African agenda ever since the demise of colonialism more than half a century ago. Unfortunately authentic or deeper regional integration is still a far-off aspiration as the progress has never really moved beyond the level of minimalist sub state and intergovernmental cooperation (Olivier 2007:25). As Fioramonti (2013) has also argued Africa has copied the European model as a 'bumper sticker', simply mirroring what is most visible about it: the EU's institutional design and its overall discourse around peace and security while leaving out some critically important features of the European Model, like the process of gradual integration of sovereignty in strategic policy areas and the principle of 'cohesion', which has allowed for the adoption of structural and cohesion funds to contrast the negative impacts of the common market. It is consequently a well-documented observation within the literature on African integration that Africa’s regional integration efforts have been less than satisfactory especially when compared with the experience of some other regions of the world especially the European Union after which its institutions have been modelled. The reasons given for this less than satisfactory performance have been well documented though the commitment of African governments to the ideals of African integration has been unrelenting. This commitment can be explained by the perceived benefit of economic development that could be achieved through an integrated and united Africa. As a result a number of institutions and formal organisations have been set up and treaties ratified in a bid to make this regional integration vision for the continent to become a reality.