Institutional Design of Regional Integration: Balancing Delegation and Representation

Abstract

Regional economic integration involves the removal of barriers and the establishment of common rules. Common rules can be facilitated by delegating policy initiative to an independent executive agency. Several Asian governments oppose any such delegation. However, the lesson from the European Union is that a supranational agency can be tightly controlled if it is carefully designed. The paper assesses the prerequisites for such a design in Asia: specifically whether national preferences have converged, and whether an equitable system of representation can be established. Several institutional scenarios for an “Asian economic union” are considered.