ABSTRACT
There is no established convention for the designation of “developed” and “developing” countries in the United Nations system. Low levels of development in Latin America are due to a combination of causes, some of which are rooted at the national level while others are related to the failure of regional organizations. There are three recognized sources of development: accumulation of human, physical, and social capital; investment in innovation; and political institutions. Regional organizations are instances of the last category; therefore, it is relevant to understand how political institutions promote development. They do so through three mechanisms: “government credibility, legal protection and enforcement, and public good provision. Initially, democracy was neither a goal of nor a condition for regional integration.
