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in developing countries because of issues of state capacity. Wherecountries are unable to manage their external deficits due to structuralconstraints and governance challenges then they are unlikely tobe able to enter into single currency arrangements. The same is truefor the administration of rules of origin requirements in preferentialtrade areas.Some key shared values of the African Union relate to identity, opportunity,justice, and fairness. When these are not observed thereis potential for conflict, which also undermines economic and socialdevelopment, including through the wiping out of social capital andtrust. Similarly, with open borders and glaring disparities in economicopportunity within a regional grouping, people are likely to resort tomigration which in turn can arouse feelings of xenophobia. Sharedcultural heritage and affinities can help manage such processes andkeep states from closing their borders when confronted with largenumbers of refugees or economic migrants from within their regionalgrouping.A key shared value in integration and governance processes relatesto placing the improvement of the human condition at the centre ofdevelopment efforts. Regional integration groupings must accordinglybe governed with development outcomes in mind. In additionto the potential gains from trade, economies of scale from widermarket opportunities and the pooling of resources to undertakecommon projects, regional groupings must remain accountable totheir people in the policy stances that they adopt. Regional policiesmust promote the achievement of the Millennium DevelopmentGoals and encourage foreign direct investment and should not be focusedsolely on short-term gains. The ability of a financial institutionsuch as ECOBANK to successfully open and operate branch officesin several member States of ECOWAS attests to the existence of regionalpolicies that enable transboundary investment in that region.Thus far, I have emphasised how the shared values underpinninggood governance impact on regional integration but there are alsoways in which the converse is also true. Being together in a regionalintegration grouping provides opportunities for countries to learnfrom one another, especially in the process of adopting commonpolicies. It also provides a framework for clearly articulating and developingshared values. The example of the African Union is salu-106 Part Two