ABSTRACT
Regional integration (RI) can affect poverty in a variety of ways. The RI effects through merchandise trade are thus likely to remain limited in regions amongst poor countries with similar production structures; expectations that this would lead to large development benefits should therefore be tempered. While there may well be dynamic effects and these can be more important than static effects, the evidence of this remains up to limited, and it needs to be shown whether dynamic effects from RI support dynamic effects from multilateral integration. The effects of RI on investment are positive, but the benefits are likely to be distributed unequally across the region. For Bolivia, new evidence by Nina and Andersen shows that RI has affected the country’s trade composition, geographically towards more trade with ANDEAN and MERCOSUR, and sectorally in a shift from minerals towards vegetable fats, food and beverages. RI processes affect the incentives to engage in multilateral integration.
