ABSTRACT
Economic integration between groups of Third World countries has had continuing appeal as a means to promoting economic development and, in particular, industrial development. A number of such schemes have been initiated, and have experienced varying fortunes, raising questions both of the efficiency of existing schemes and soundness of the theoretical and policy arguments upon which they are based. The preference, fundamentally, is based on the assertion of dynamic gains from integration, and particularly on the ability to establish industry more successfully than could be managed under conditions of either autarky or free trade. The arrangement described would be compatible with eventual free trade if the comparative disadvantage with the rest of the world could be eliminated as a result of ‘learning by doing’. While the theoretical foundations and empirical verifiability of the dependency school have been questioned,12 other writers in the ‘mainstream’ tradition have pointed to practical limitations on the manufactured export opportunities facing developing countries.
