Rent seeking and regional integration agreements

Abstract

Abstract-This paper explores the motives behind the formation of intra-African regional integration agreements (RIAs). We aim to see whether rent seeking can be identified as a statistically significant driving force of African integration. The traditional reason for economic integration, the static and dynamic effects, predict no, or even a negative effect on welfare. Moreover, many of the new regionalism theories are conditional on strong economic integration. Rent seeking behavior and the regime boosting hypothesis are two exceptions. Not only can they credibly explain the proliferation of African trade agreements in the absence of a positive effect on welfare, they can also explain the lack of progress in clearing away the many obstructions to regional trade. However, in spite of the anecdotal evidence, we cannot find convincing evidence that rent seeking behavior has been a motive for African integration. Corruption is insignificant, regardless of the way of testing, or the corruption indicator used. The factors that seem to explain African integration are all geographical, not economic nor political.