Bajo, Claudia Sanchez. (2000) 2000. Business Actors in Mercosur, The political economy of regionalism (PhD Thesis). 1stst ed. Düren, Germany: Shaker Verlag.
PhD Dissertation in fulfilment of the requirements for the degree of Doctor of Philosophy in Development Studies of the International Institute of Social Studies, The Hague, The Netherlands, 12-12-1999. The dissertation approaches the subject of regionalism through a historically grounded research strategy. From the meso-level and a sectoral focus, the evidence collected from interviews of persons from industrial sectors as well as governments is examined; the case study being Mercosur and two industrial sectors, petrochemicals and steel. Due to the period under study (with a main emphasis from 1990 to 1995 and a follow-up until the beginning of 1999), the issues of globalisation and world economic restructuring needed to be examined as well, in order to observe any relation with the theme under investigation. The subject is not only current in a period when globalisation and regionalism have been considered as established tendencies in the world. It is also crucial for less industrialised countries searching for development strategies and forms of international insertion in the post-cold war era. This dissertation explores the ongoing transformation of the world political economy. A main objective of the study was to trace the private regional cooperative strategies in economic sectors which developed as part of, and in response to, the public/official, regional economic integration arrangement.
Private regional co-operative strategies are defined as the functional and structural institutional processes and arrangements that forge linkages between the national economic sectors. Public and official regional attempts are defined in principle by the preference of nation-states to establish a new socio-economic, legal and political entity that may increase both the bargaining and negotiating power in relation to third parties. Both private regional cooperative strategies and regionalization are part of what is currently termed ‘regionalism’, here understood as the voluntary disposition of a grouping of countries to associate their resources, knowledge and capacities, developing links (private and public), common rules and practices into institutionalised arrangements. Therefore, this study does not aim to measure regional integration nor regionalism, nor to depart from a clear typification of Mercosur. Rather, the aim is first to disclose and understand better the process that leads to the creation and definition of the market and regional regulation, and, thence, to grasp Mercosur’s regionalism. A second aim is to reveal and comprehend the process that advances the possibility of a differentiated social and institutional field covering the region, which could explain what has made Mercosur sustainable so far. The Mercosur region was strewn with a history of ISI policies, and business actors in the South were not expected to support strongly the RIA attempt. Furthermore, in the Mercosur region, the sustainability of the RIA process has been explained by two factors: the political will of the national presidents and the dynamism of individual firms.
The research thus had to be broadened: how have firms interacted with the governments? Has such interaction been based only on individual initiatives? Has it had any influence on, or any role in the Mercosur arrangement? To this effect, the sectoral focus is not intended to provide a generalisation for a regional integration process as a whole. The choice is to concentrate on two similar sectors with important economies of scale, which are economically prominent and politically sensitive in the countries concerned, thereby likely to react to, and influence, regional integration policies. Given the lack of general theory and scarce analysis of the sub-national level and cross-national co-operation (as examined in Chapter 1), a sectoral focus is considered as a suitable starting ground for this research. Besides, the meso-level perspective is intended to reveal agendas and bargains (in Susan Strange’s words). The reasons for the selected approach and focus are expounded in Chapter 2.
The study reaches several conclusions as regards Mercosur’s regionalism during the period researched, and in particular over its sustainability and the role of business actors in the process. First, regionalism is a regulatory process by which regional patterns of relations may be gradually institutionalised. These patterns would then tend to be co-ordinated in a regular fashion, embodying particular values and normative rules, and possibly formalised into new structures. Through a sectoral and meso-level vantage point, Mercosur’s regionalism is seen as a process based on certain values, conceptualised under the name of “open regionalism” and crystallised on the grounds of a coalition of interests (state and business). Such vantage point guided the understanding of regionalism: i.e., as a regulatory and policy-making process, through which regional patterns of relations enter a stage of institutionalisation in order to achieve sustainability. Second, Mercosur’s success and sustainability has rested both on a coalition of interests as well as of actors’ participation in the process. In addition, although the general portrait of Mercosur is one of trade success and low degree of institutionalisation, a sectoral focus at the meso-level, based on a grounded qualitative analysis, has provided a qualified and more accountable view. The evidence showed that the sustainability of the Mercosur case has rested to a significant degree on the involvement and participation of business actors in various forms and degrees. Third, as interviewees asserted in 1995, the core of Mercosur’s regionalism was not about trade. At the end of the century, this understanding has been reaffirmed by academia. As discussed in chapter 1, the 1990s regionalism is ‘new’ because its core issues are not related to trade. Third, the sustainability of regionalism appeared as constructed on a political-economic basis. On the one side, sectoral restructuring was done at the regional level through the enlargement of business scales and a sharper definition of business scope, with some holdings becoming core firms within each sector. Regionalism has been instrumental both to states and business in the 1990s context of globalisation of economic restructuring and of an emerging type of world-wide oligopolistic competition. This regional restructuring was embedded in the 1990s’ globalisation. During the research, the focus of Mercosur’s regionalism was to ease flows that were increasingly internalised by holdings and big economic groups, in terms of production, distribution and services, as well as information and management. On the other side, it involved a necessary correlation through regional norms and mechanisms to ensure the certainty of constant regular flows within Mercosur, be they capital, goods or services. Generalisations based on these two sectors, which have many features of their own, should be avoided until other economic sectors are studied. What is important to stress, is that any changes in systems of production need to be accompanied by appropriate co-ordinating institutions to suit the needs of emerging core firms or groups. Thence, and fourth, during the period under study, Mercosur’s regionalism reflected a mixed-partnership in policy-making between state-officials and business-actors, within broader political regimes described as ‘delegative’ democracies by O’Donnell. The emerging regional policy networks have appeared sustainable, as long as their co-ordinating capability is not threatened to an absolute degree by e.g., external financial shocks.
Contrary to the idea that the regional integration process has taken place under no supra-national authority combined with a loss of state co-ordination through the unravelling of ‘regulation’, a delegation from the state to business actors to define regional regulation concerning their industrial sectors could be observed. This included issues such as the CET, competition rules, harmonisation of technical norms, mechanisms to solve conflicts, etc., and tended to emerge through a negotiated convergence at the sectoral level. In this regard, states retained an important role i.e. in regard to the enforcement of the rules agreed. While states’ competition for investment influenced a debate on harmonisation of taxation, environment, and labour policies, which dealt with systemic costs to industry, business actors engaged in the building of sectoral regulation and governance through the supply of supranational institutions (norms, agreements, mechanisms of decision-making and conflict-solution) that could enforce common norms at the regional level. Theoretical and policy/making implications and future directions for the study of regionalism in the new century are expounded in Chapter 10, which ends with brief commentaries on two issues rising through the analysis and writing of the thesis: a) the market as institution, and b) business scales and scope as underlining forces of the ‘globalisation’ of a capitalist net-economy.
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