Question

Discuss Factors that make it congenial or agreeable for a group of nations to start a process of Economic integration?

Cite the sources consulted and include the references at the end if there is so.

Answer 1

Factors:-

1. Economic factor

Since all the goods and services can't be produced by just one nation, the other nations are cooperating with each other to trade the goods or services they require. This helps in the reduction in the costs of the goods which would otherwise be produced by the home country at large expense or would have foregone it for other expensive options. And not just the costs of goods, economic integration is also beneficial for the reduction in the transportation of such goods.

For example, new technologies and better communication modes can be exchanged for developing the economy of the nation.

2. Political Factor

In this age and time, all the countries need to act cordially with each other. To maintain the peace and security of the nation, economic integration is a great tool. National defense is an important point to be considered in this scenario as well. A politically isolated country is endangered on so many levels. In case of urgent needs of funds, the nations in such ties will support each other whenever there is any requirement such as a terrorist attack, natural disaster, etc.

3. Geographical Factor

The geographical state of the nations significantly differs from each other. For the improvement in the welfare level and distribution of the income of the peoples, the economic integration is once again a great option. This also results in higher consumption. The domestic businesses of the nation will have more competition and more targeted markets.

4. Institutional Factor

Employment and education opportunities through economic integration have greatly increased. There are now fewer restraints while traveling to other countries for employment or education purposes. This also results in lower costs for both the employees and employers.

5. Cultural Factor

The nations are becoming open and everyone is getting curious about each other's cultures. It becomes a factor for efficient economic integration between the countries around the world.

6. Social Factor

The taste of society has been changing which has been a result of globalization and the influence of the individuals of different settlements.

References:

Factors Driving Global Economic Integration by Michael Mussa

Understanding the Determinants of Economic Integration in Latin America by Laura Márquez-Ramos, Luis Marcelo Florensa, and María Luisa Recalde.

New Economic Geography and Economic Integration: A Review by Andrea Ascani, Riccardo Crescenzi, Simona Iammarino