RTA and Economic Growth. The case of SADC - DAAD partnership ...

ecause of the imposition of larger countries culture; which may result in standardization of culture
among member states.
Application of regional integrations in the world has been a puzzling issue over time. Regional
integration has been encouraged to make good relationship based on regional stability and
development, hence aiming at optimising revenues at fewer risks. The formation of RTAs is driven
by a number of factors, including economic, political and security considerations. Membership to
integration is a choice which may be driven by motives like; gaining access to large markets, new
customers, competitive shoots, benefiting from MFN tariffs, enhancing investments, promoting the
environment and labour standards and so on. These integrations vary widely in structure, objectives,
sector coverage and membership. As mentioned earlier, integration envelops developing countries
amongst other staged countries. To that, Whalley (1996) argued that regionalism could serve as an
elite-socialization process and as a lock-in mechanism for domestic political and economic reforms
in less developed RTA members.
In the past decades, many authors explored integration agreements and concluded that global
economic integration is the vital to promoting resource allocation, technology transfer and
augmenting the standard of living, hence growth. Some studies have added-on that economic
integration led to trade imbalances, increased financial market volatility and nurtured less-effective
macroeconomic policies. Definitive conclusions have yet to be drawn. Moreover, Michael Mussa,
the former director of research at the International Monetary Fund (IMF) found three fundamental
factors that affect the process of economic integration, namely technology, preferences and public
policy. Increased technology has assisted economic integration by lowering the cost of
transportation and also reduced the cost of communication. Public policies depending on a
country’s objectives may promote or even hinder economic integration. Although the factors
independently influence integration, causality between them is present.
In theory and complementing statement of Balassa (1965) and DeRosa (1992), RTAs accomplish
common objectives that encourage economic transformations in trade, customs union, common
market economic union amongst others. Combination of regional, sub-regional and multilateral
negotiations enabled government to be in a more open environment for cross border economic
transactions. Government seek to enforce regional security and peace with member states and may
even try to increase power in their negotiations, by first securitizing their governance commitment