ABSTRACT
This chapter focuses on the instruments for forging solidarity among possible member or participation countries and argues for the need to supplement the emerging East Asian trade and monetary integration with the establishment of regional development banks. Regional integration is a process through which political and economic interests should be combined with regional identities, because, without collective identities, countries are not tied to each other. Regional identity, however, is based on regional solidarity, as the maintenance of a nation as a permanent entity requires national solidarity. Indeed, there are three possible ways to forge solidarity: fiscal federalism, regional policy, and development banks. But, given the current situation on regional arrangements in East Asia characterized by the absence of any meaningful institutions on the regional level, it would be difficult for the East Asian region to dispose of the income transfer through the first two instruments.
