Is the Whole Greater than the Sum of its Parts? Strengthening Caribbean Regional Integration

By Abdullah Alhassan, Mary E. Burfisher, Julian T Chow, Ding Ding, Fabio Di Vittorio, Dmitriy Kovtun, Arnold McIntyre, Inci Ötker, Marika Santoro, Lulu Shui, Karim Youssef

January 17, 2020

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Abdullah Alhassan, Mary E. Burfisher, Julian T Chow, Ding Ding, Fabio Di Vittorio, Dmitriy Kovtun, Arnold McIntyre, Inci Ötker, Marika Santoro, Lulu Shui, and Karim Youssef. Is the Whole Greater than the Sum of its Parts? Strengthening Caribbean Regional Integration, (USA: International Monetary Fund, 2020) accessed September 19, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Deeper economic integration within the Caribbean has been a regional policy priority since the establishment of the Caribbean Community (CARICOM) and the decision to create the Caribbean Single Market and Economy (CSME). Implementation of integration initiatives has, however, been slow, despite the stated commitment of political leaders. The “implementation deficit” has led to skepticism about completing the CSME and controversy regarding its benefits. This paper analyzes how Caribbean integration has evolved, discusses the obstacles to progress, and explores the potential benefits from greater integration. It argues that further economic integration through liberalization of trade and labor mobility can generate significant macroeconomic benefits, but slow progress in completing the institutional arrangements has hindered implementation of the essential components of the CSME and progress in economic integration. Advancing institutional integration through harmonization and rationalization of key institutions and processes can reduce the fixed costs of institutions, providing the needed scale and boost to regional integration. Greater cooperation in several functional policy areas where the region is facing common challenges can also provide low-hanging fruit, creating momentum toward full integration as the Community continues to address the obstacles to full economic integration.

Subject: Crime, Economic integration, Labor, Regional integration, Tax incentives, Taxes

Keywords: Average revenue, Banking sector, Caribbean, CARICOM, CARICOM economy, CARICOM member, CARICOM state, CARICOM trade, Common market, Cooperation, CSME, ECCU authorities, Economic integration, Europe, Exercise authority, Factor market, Global, Labor market, National budget, OECS authorities, Regional integration, Sovereign state, Tax incentives, Trade cost, WP

Publication Details

Pages:

79
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2020/008
Stock No:

WPIEA2020008
ISBN:

9781513525860
ISSN:

1018-5941

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