EU-integration knowledges Domonkos 1st Semester, Academic Year 2010/2011 Written by Endre I. The genesis of integration theories I. It was only in the last half-century that international integration became the subject of research by social scientists. Economics and political science really began to deal seriously with the question only after World War II. The intensification of efforts at European integration, that many integration experiments and the groupings achieved (the EU, EFTA, NAFTA, ASEAN) gave an especially strong impetus to research. Integration research is not without theoretical antecedents. The conceptual foundations of the theory of international economic integration can be traced all the way back to the classics (Adam Smith and David Ricardo). Concrete theoretical and methodological interpretations of them, and the techniques of analyses employed are based mainly on neoclassical and welfare international economics, which examined the benefits gained from international trade. Analysis of the international integration process became general in international economics and world economics only in the period after World War II was similar in the political science. From the 1950s, customs union theories are regarded as the basis of the economics literature
on international integration (they analyzed the advantages and disadvantages of customs union). In the political science field neo-functionalism, federalism and the analyses relating to intergovernmentalism are recognized as the main theoretical currents with regard to attempts at European integration. I. The genesis of integration theories II. Despite the novelty of integration theory it must be remembered that the idea of European union and within this, for example, a United States of Europe was by no means new. From the 16th century the idea of uniting Europe, and efforts aimed at this, had occupied the minds of many of the continents great thinkers (Erasmus of Rotterdam, Jan Amos Comenius, William Penn, Franois-Marie Voltaire, Charles-Louis de Secondat Montesquieu and Immanuel Kant). Between the two world wars the Pan-European movement had a great influence on all kinds of political trends, and concrete proposals were put forward. Richard Coudenhove-Kalergis book about Pan-Europa. Building a united Europe on federal structures. Aristide Briand (French Foreign minister): Memorandum on the Organization of a Regime of European Federal Union. In 1941 the so called Ventotene Declaration was formulated by Altiero Spinelli (For a free and
united Europe). The coherent theoretical basis and directions of integration, and within it, European integration, thus gradually took shape. The integration attempts of recent decades drew the attention not only of economists and political scientists but also of academics in many other fields, and on this basis many theoretical trends and schools of integration theory emerged. The subject of integration involves legal, sociological, historical and cultural research. In connection with integration, European studies, as a new field of scholarship, is increasingly charactarized by a multidisciplinary approach (combining history, economics, law, sociology, political science and culture). I. The genesis of integration theories III. Integration is conceived as a complex process, which embraces the different fields of social life. Nye for example, distinguishes between economic, political and social integration. Economic integration would constitute high trade; social integration would include the unification of masses, special groups or elites; political integration would encompass a wide array of phenomena, including more decisions on the international level, international bureaucracies, and attitudinal similarity among nations. Despite the international and extensive research, it would be difficult to give a comprehensively valid and generally acceptable definition of international integration. We can define integration as a state or as a process, as a fact or as an aim to be achieved.
From the most varied theoretical and political platforms integration is treated as an aim- or requirement-concept. In general, integration theories focus on five important dimensions of the process. - the content (or essence) of integration processes; the organizational forms and institutions of integration; regulation (policies) and governance of integration; the advantages and disadvantages of integration (cost-benefit analysis); and finally - the problems of integration maturity (capacities or capabilities for integration). II. Division of labour theories and transactionalists I. The content of integration can be approached from several directions. Interpretation of the content of economic integration can perhaps best be linked to theories of the division of labour. From the 1970s approaches from this aspect were particularly characteristics of the integration literature of the East European countries, which sought to deduce the phenomenon of integration from the evolution of the international division of labour. According to the theory of the international division of labour, a precondition of integration is a certain intensity or quantitative densification of the international division
of labour, which beyond a certain point results in a new quality. Integration can be seen as an organized or institutionalized division of labour. We can define integration as a process embracing various forms and areas of the international division of labour. Integration is a comprehensive form of international cooperation that extends to the whole re-production and the systems of international relations (trade, the flow of capital and labour, technical relations, macroregulation, etc.). The national economy, as a basic macroeconomic unit for the production, distribution and the use of assets is a determinate system. The social re-production process today still consists basically in re-production of domestic products. The national economy provides the framework in which, through the system of economic forms, the proportions of reproduction and equilibrium of economic activities are achieved. II. Division of labour theories and transactionalists II. From this point of view, the national economy embodies the determinate complexity of social production. International economic integration unites the national re-production processes and increases their reciprocal dependence (Tibor, Palnkai). Thus internationally microintegration takes place within the framework of transnational cooperations and company relations. The macrointegration process can be defined through the various degrees of commercial and economic groupings. Integration, then from the economic point of view can be defined as an intensive, lasting and long-term, organized and institutionalized division of labour embracing the whole reproduction process. The economic theories of integration emphasize that the international division of labour,
through specialization and cooperation, is accompanied by an increase in efficiency. According to division of labour theories, enhancement of efficiency and prosperity is the general, fundamental motivating factor in integration. Political science concepts of integration have differing approaches with regard to its purpose and value. According to many schools of political science, international integration assists in the handling and solving of conflicts, arguments, tensions and clashes of interest. II. Division of labour theories and transactionalists III. Among the different schools, first have to mention transnationalism, which shares several common or similar aspects of interest and approach with division of labour theories of integration. In dealing with conflicts and tensions, as the condition and basic objective of integration, transactionalism conceives integration in a very broad sense as the formation of security community. The transactionalist or communication theories can be associated directly with the works of Karl Deutsch. Thus, international integration is defined as being about the achievement of security within a region or among a group of states. The definition of security community was bound up with the conception of integration. Security communities were groups of people that had become integrated. Further, integration was defined as attainment, within a territory, or a sense of security community and of institutions and practices strong enough and widespread enough to
assure a long-time, dependable expectation of peaceful change among its population (Deutsch, Karl). The transactionalists, in many respects similarly to division of labour theories, also put great emphasis on intensity of relations and cooperation as the lever for building a security community and consequently for integration. According to these, conflicts and rivalries (wars and disputes) can be attributed to divergences, differences, absence of similarity, which may be rooted in the economy (differences in levels of development and incomes) or culture (traditions, religion, etc.). Thus integration is an economic and social rapprochement which in certain areas eliminated distances. The equalizing of levels of development therefore features as a criterion of integration. III. Interdependence and integration I. From the point of defining the content of integration we attach special importance to interdependence. The development of mutual dependence is closely related to the development of the division of labour, particularly the international division of labour that has charactarized recent decades. We can state that eventually a certain intensity of international cooperation leads to the internal development of interdependence and ultimately to its increase. In a broader and more general approach, interdependence can be interpreted as a state or
process when the position of agents becomes mutually dependent and their actions mutually determined. Interdependence can be defined as a new quality of international relations, when as a result of the expansion of cooperation, at a certain point the position of countries changes significantly toward each other, and their policies and actions become mutually dependent. Theorizing about interdependence started as long ago as the 1950s and 1960s, but in international relations interdependence became a core concept only during the 1970s. Dependence means a state of being determined or significantly affected by external forces. Interdependence can be defined as means of mutual dependence. Interdependence in world politics refers to situations charactarized by reciprocal effects among countries or among actors in different countries. III. Interdependence and integration II. These effects often result from international transactions flows of money, goods, people and messages across international boundaries. The effects of transactions on interdependence will depend on the constraints, or costs, associated with them. Where there are reciprocal, although not necessarily symmetrical, costly effects of transactions, there is interdependence.
Where transactions do not have significant costly effects, there is simply interconnectedness (Keohane and Nye). To sum up, it can be stated that in this connection integration means that through interdependence the given countries development, equilibrium conditions, economic stability and performance are determined by their relations with their community partners. The process becomes organized into regional institutions, but globally too is organized and served by an increasing number of institutions. The world economy is an independent organic system, which with the globalization of the last few decades can increasingly be seen as an integrating structure. Integration, therefore, is a cooperation between the individual elements of a system in which the stability and internal equilibrium of the system is maintained, or even by means of which it is achieved. Integration improves the performance and competitiveness of the group of countries and stabilizes their economy and their social and political relations. Interdependence is the most important feature of the content of integration. IV. Basic form of integration I. Integration can be implemented in the form of various commercial and economic groupings and intitutions. These can be regional free trade blocs, which apply collective protectionism or discrimination againts outsiders, or various sorts of integration in which economic policies are integrated.
On the basis of the work by Bla Balassa, considered a classic of the literature on integration (Balassa 1961), the following main forms can be distinguished: 1. The free trade area. Within the area is liberalized by the reduction of customs tariffs and quotas, and with outsiders every member country applies separate customs tariffs and quotas. To counter exploitation of national differences in customs tariffs, certification of origin (rule of origin) is demanded. For certifying the country of origin of goods, determination of local content is important. 2. The customs union. Within the area foreign trade is liberalized, but with outsiders common customs tariffs (but not necessarily quotas) and ultimately joint foreign trade policies are applied. To ensure that there are no obstacles to competition, a common competition policy is essential. If the customs union is complete, extending to every sector of the economy, then other common policies (like joint agricultural policy) may also be required. 3. The common market. This is more than a customs union, in that with-in area there is not only free movement of goods and services but also a free flow of factors of production (capital and labour). Common market measures can also be based on free trade agreements (e.g. the European Economic Area, involving the EU and EFTA). IV. Basic form of integration II. 4. The single market. This represents complete liberalization, internal market conditions, with the removal not just of customs tariffs and quantitative restrictions but of all restrictions of a
non-tariffs nature. This was implemented in the EU in 1992, and now extends to the elimination of physical barriers (border formalities), technical ones (standards, specifications, etc.) and fiscal ones (tax harmonization). The unified market presupposes wideranging harmonization of economic regulations (laws) and economic policies. 5. In economic union, not only has market integration taken place, but integration of economic policies is also implemented, in the form of the unification and harmonization of economic policy, which in its final phase can lead to unification of domestic economic policies at community level. The economic union supposes the introduction of a common or single currency, which leads to monetary union. Economic and monetary union is the most highly developed form of economic integration, and apart from a common currency requires common monetary policy and a central bank. Economic and monetary union presupposes unified market integration in many respects follows from it (complete capital market liberalization and a single currency). 6. Political union. This involves the gradual transfer to community level of power and legislative authority (parliament, government, jurisprudence, etc.). It assumes the establishment of a supranational authority, which can take decisions that are binding on all the member nation states. Each form represents higher and more developed levels of integration. On the basis of various considerations we can draw dividing lines between them, but one of the most relecant courses open to us is to distinguish between forms of market integration and forms requiring closer economic policy integration and ultimately political integration. V. Customs union theories I.
The first comprehensive assessment of the advantages and disadvantages of regional integration took place within the framework of customs union theories. The customs union, as a trade grouping, makes it possible to analyse and expand the regional implications of the international division of labour. The customs union aims at complete internal free trade, while applying common external tariffs in foreign trade, and a common trade policy. Compared with universal free trade it is often regarded as a second best strategy, which though it achieves regional free trade among the partners, nevertheless represents joint protectionism with regard to countries outside the union. In connection with the customs union, Jacob Viner in his study, which has become a classic of the integration literature, makes a distinction between the effects of trade creation and trade diversion. Thus trade creation is regarded as the positive effect of customs union. Because of the abolition of tariffs, within the union less efficient domestic producers with higher production costs are no longer protected. Production and consumption is reorganised in favour of the new external community partners with the lowest costs. Thus new trade is created between the partner countries, since costly domestic production is now replaced by imports from the other countries.
V. Customs union theories II. In comparison with this, trade diversion is a negative process and represents a loss. Prior to the customs union, at a given level of tariffs in the absence of relative discrimination on a given level of tariffs in the absence of relative discrimination on a given countrys market theoretically all external producers could be assumed to have an equal chance. In these circumstances any competitors can gain advantage only by lowering their level of costs. The situation changes if within the given zone a group of countries form a customs union. Reciprocal tariff reduction puts the new partner countries in a more favourable position in each others markets, even to the extent that the latter are able to squeeze out former cheaper suppliers from non-member countries. Thus trade diversion takes place, which means that import is transferred from lower-cost external countries to less efficient new partners. So while trade creation means replacement of domestic products by a cheaper imported ones, trade diversion involves replacement of a cheaper source of import by another, costlier one. The overall effect of the customs union is given by the balance of the two. Jacob Viners original analysis concentrated on interpreting trade creation and diversion, and it identified gains and losses mainly from a theoretical point of view. James Meade was the first to attempt a comprehensive quantification of all the effects of a customs union.
V. Customs union theories III. Meade pointed out that in analysing the advantages to be gained from a customs union, not only the volume of trade created and diverted but also cost savings per unit of product must be taken into account. He observed that through it is directly possible, as a result of customs union, for the volume of trade diverted to be greater than the volume of trade created, customs union as a whole profitable. The reason for this is that the cost savings associated with trade creation are great enough to counterbalance the losses due to trade diversions. In quantifying the effects of customs union, Meade introduced the distinction between the so- called production and consumption effects. The assessment of the advantages and drawbacks of customs union can be made more accurate by taking the consumption effects into account. The supplementary consumption effect and the gains from it may be great enough in themselves to counterbalance the negative production effects of trade diversion. In order to calculate this it is necessary to quantify the consumption effects. The amount of gain may be determined by multiplying the difference in prices before and after the union by the supplementary volume of import expanded as a result of the consumption effect. This must be added to the gain resulting from trade creation. Customs union theories examine the advantages and disadvantages deriving from trade creation
and trade diversion using a comparative approach. At the same time they analyse the effects and consequences on micro- and macro level as well. The gains and losses are examined not only in national economy dimensions, but on the global world economy as well. In contrast to universal free trade, every customs union necessarily involves a lesser or greater degree of trade diversion and represents sub-optimal utilization of resources. VI. Liberal integration theories On the dominant trends of international integration theory is represented by the liberal or neo-liberal schools. The liberal theory of integration rests on the premises of classical economics, the principles of unlimited free competition and free trade. According to them, integration is possible where free movement of goods and services and factors of production exists and there is unlimited free competition (Aron 1953). Several aspects of the liberal concept of integration must be highlighted. One is that, according to the schools of economics, integration is achieved through the four freedoms, the free and intensive flow of goods, services and the factors of production. Integration is identified with freedom of flow and movement by the so-called communication and cooperation schools as well. They extend the free flow requirement to every area of social and economic life, not just economic cooperation (free trade and flow of production factors) but to social, political and cultural relations as well. Integration means the approximation to each other of levels of economic development and the gradual disappearance of differences. In a certain sense factor-prize equalization implicitly presupposes that behind it there is equalization of productivity levels, which in turn implies similar levels of development. Liberal theories can best be interpreted with reference to the free trade area, customs
union, common market and single market. VII. Institutionalism and integration I. It is a fact that integration is a structured process, and various institutions promote cooperation and interweaving. The schools of theory that focus their analysis on institutions and questions of organization are generally described as institutionalist. International economic integration, often termed regionalism, may be defined as the institutional combination of separate national economies into larger economic blocs or communities (Robson). According to the concept of institutionalists political struggles are mediated by prevailing institutional arrangements. New institutional theory treats institutions as instruments capable of producing determinate policy and of shaping the pattern of political behaviour, thus going beyond the formal organs of government to include standard operating procedures, so-called soft-law, norms and conventions of behaviour (Bulmer). Institutions are an important framework for any social activity; they represent a certain institutional architecture; they set the norms and rules of the game; they provide the necessary policy instruments and procedures and are usually associated with conventions, symbols and cultures.
Rather that being a simple and passive vessels within which politic occurs, institutions provide contexts where actors can conduct a relatively higher proportion of positive sumbargains. Institutions offer information-rich venues where transparency prevails and where trust is high. They act as intervening variables between actor preferences and policy outputs (Rosamond). VII. Institutionalism and integration II. The heavy institutionalization associated with the early communities was particularly emphasized or, to put it differently, integration can be defined as institutionalized cooperation. Such organizational forms as the free trade area or economic union can serve as general frameworks, which are supported by other functional and political institutions. The institutionalist approach integration mainly from the political side and they link economic integration with political integration. According to the institutionalists, political integration consists in a transfer of power (decision-making, legislation, governance and implementation) from the national level to international (or community) institutions. According to Etzioni, the criterion of integration is the existence of central executive organs and common centers of identification. In addition to national parliaments, governments and other powers institutions there is
therefore an increasing need for community institutions for legislation and governance, and competences and power are gradually shifting to that level. The institutionalist integration theories are closely related, in fact, comprising several schools or trends, depending on how they see the relations between the new integration institutions and the national states (intergovernmentalism, federalism, confederalism, consociation). VIII. Federalism contra intergovernmentalism I. The federalists favour supranational, effective community power structures and institutions (Haas, Pinder, Montani). Federalism has acquires increasing political influence in the EU countries, and has exerted effective pressure in the direction of political union. The majority of federalists support worldwide political integration (world government). The main aim of Eurofederalists is the creation of the United States of Europe. One of the outstanding proponents writes that federalists point out that the national states have lost their proper rights since they cannot guarantee the political and economic safety of their citizens. They also insist that European Union should be brought about by the European populations, and not by diplomats, by directly electing a European constituent assembly (Spinelli). For these reasons, federalism is particularly preferred by some small states. They feel that their interests can be better represented in a legally framed setup than in
intergovernmental structures, where the informal decision-making processes favour the larger states. The first backlash against federalism took place in the mid of 1960s. Charles de Gaulles empty chair action was the culmination. There was a certain reassertion of nationalists sentiment among the European political elite. Emphasis was placed on national interests, and the centrality of member-state governments prevailed over emerging institutions. It was asserted that states should be regarded as primary actors in the integration process. After 1980s the integration process was accelerated (adoption of the Program of the Single European Market) VIII. Federalism contra intergovernmentalism II. Many maintain that in spite of the ups and downs of integration processes, the intergovernmentalist character of European institutions and decision making prevailed, and there has not been any breakthrough toward supranational federal structures. The predominant direction of integration was liberalization (the single market), and even the positive integration measures were subordinated to the aim of the perfect functioning of that liberalized market. Monetary union, to a large extent, followed from the single market project, and the transfer of monetary policy to union level has not yet changed this trend. At the same time, the national states were successful in maintaining their primacy in strategic
decisions. The theory which tries to describe these types of developments is called liberal inter- governmentalism. Andrew Moravcsik is the main representant of liberal inter-governmentalism theory. Moravcsik, for his part, by developing a state-centric theory of liberal intergovernmentalism, describes the Union as a regime that makes inter-state bargaining more efficient, whilst enhancing the role of national leaders. According to the definition of Murray Forsyth the EU can be explained as a confederation a voluntary association of states with common interests in building larger markets. Institutionalization is necessary to ensure the stability and longevity of the systems. IX. Integration and regulation I. One main trend of criticism of the liberal theories is that they overlook the importance of regulation of the economy. They said that free market mechanisms were not capable of creating integration. They approach integration from the side of economic policies and their attention is directed mainly towards economic union, as a form of integration. Regulatory theories do not deny the importance of the market and of liberalization, but they emphasize that present-day economies are no longer based on free-market mechanisms in the 19th century sense, but that economic life is influenced, regulated and directed by the state.
According to regulatory theories, in addition to the market, economic policies have to be integrated, which on the international level enables international economic policies to be unified, harmonized, and in certain cases implemented in a collective, community manner. Thus international integration means state regulation and intervention is carried out at international (community) level. The most important representative of integration theories related to regulation is Jan Tinbergen. According to Tinbergen: Integration may be said to be the creation of the most desirable structure of the international economy, removing artificial hindrances to its optimum operation and deliberately introducing all the desirable elements of coordination and unification. The problem integration, therefore, forms a part of a more general problem, namely that of the optimum economic policy (Tinbergen). IX. Integration and regulation II. In Tinbergen's conception integration is an optimal economic structure which on the one hand removes artificial hindrances to market optimalization, and on the other hand helps to form the optimum economic policy. Thus international integration means that economic optima are not attainable within national frameworks but require the development of international institutions, mechanism and regulation. Policy optimalization refers to the fact that ultimately, international economic integration has
to be viewed as a state and process for enabling its participants to achieve a variety of common goals more effectively by joint or integrated action than they could by unilateral measures (Robson). The difference between liberalization, the removal of artificial barriers, and the integration of economic policies is expressed by Jan Tinbergen through the introduction of the concept of negative and positive integration. Negative integration means measures consisting of the abolition of a number of impediments (elimination of customs, quantitative restrictions and liberalising the market) to the proper operation of an integrated area. Positive integration means the creation of new institutions and mechanism and their instruments or modification of existing instruments. Giandomenico Majone considers the EU as more and more an instance of a regulatory state, or at least one which is one the way to becoming such an entity. According to him, the regulatory state may be less of a state in the traditional sense than a web of networks of national and supranational regulatory institutions held together by shared values and objectives, and by a common style of policy-making. X. From functionalism to neofunctionalism I. For the functionalist integration theories the most important question is the appropriateness and effectiveness of regulation.
The functionalist schools emphasize directly on better functioning of the integration system, and on the improvement of its functioning. According to the functionalists, the nation state is increasingly incapable of fulfilling its basic social, economic and political tasks. Therefore more and more shared aims and functions should be delegated to the more efficient integration organizations, which are capable to implement these more perfectly. The functions may be economic, political, social, infrastructural or military. In these spheres they can represent more efficient solutions to tasks like economic growth or the acceleration of technological progress, development of infrastructures at international level (construction of a community road network or communication system), equalization of development levels or in fact greater military security. The functionalists are aware that shifts in the exercising of functions presuppose institutional changes. The main endeavor of functionalist is to create supranational institutions. The theory of functionalism in international relations is based on the hope that more and more common tasks will be delegated to such specific functional organizations and that each of these organizations will become in time supranational; that is, superior to its member governments in power and authority. In this way, says this theory, the worlds nations will gradually become integrated into a single community within which war will be impossible (Deutsch). X. From functionalism to neofunctionalism II. Functionalists, like federalists, consider democratic political support important also from the point
of view of the successful operation of institutions. The so-called neofunctionalists (Haas and Leon Lindenberg) emphasize prosperity, internal peace and external security, the role of national political elites, and in contrast to the global view, the possibility of regional integration. But the functionalists were originally in favour of universal peace and were against regional integration. One of the most controversial ideas of neofunctionalists is the notion of spillover. The idea of spillover was used to depict the mechanism supposedly driving processes of regional integration. The creation and deepening of integration in one sector would create pressures for further economic integration within and beyond that sector, and greater authoritative capacity at the European level. The theory of spillover was questioned primarily by intergovernmentalists. They criticized the notion of any automatism or functional dynamism which would drive integration processes. Instead they emphasized the importance of national interests, and the primary role of national actors. As opposed to the neofunctionalists, intergovernmentalist theorists also denied the need for supranational institutions. The neofunctionalists emphasize the importance of the European Commission and the role of national and transnational interest organizations. The arguments of neofunctionalists were reinforced by the new developments of the 1980s, particularly the launching of the program of the
single European market, and then the amendment of the Single European Act. XI. Multi-level governance I. The main role of the multi-level governance is to reveal of improving the conditions of human governance. The latter may be defined as the art of organizing the production of knowledge about the constitution of human activity. By theorizing is meant the systematic study of the conditions, structure and evolution of that constitution, by means of explicating, interpreting, understanding and, where possible, predicting individual, small- or large-scale social action (Chryssochoou). Multi-level governance amounts a multilayer polarity, where there is no centre of accumulated authority but where changing combinations of supranational, national and subnational governments engage in collaboration (Hooghe). Multi-level governance is a product of integrating world economy, which with growing interdependence, both regionally and globally, is a response to new challenges and needs in controlling and managing complex processes and harmonizing interests within a multi-actor system. The point of departure for this multi-level governance (MLG) approach is the existence of overlapping competencies among multiple levels of governments and the interaction of political actors across those levels. States are not an exclusive link between domestic
politics and intergovernmental bargaining in the EU. Instead of the two-level game assumptions adopted by state-centrists, MLG theorists posit a set of overarching, multi-level policy networks. The structure of political control is variable, not constant, across policy areas (Marks, Nielsen). XI. Multi-level governance II. Multi-level governance means the emergence of a new structure, where the constitutional foundations of sovereignty may remain largely unchanged, leaving national member states as basic entities, but at the same time, it challenges the functional or operational autonomy of states by sharing decisions, and pursuing certain policies in a shared way. Compared to intergovernmentalism, multi-level governance brings in a third dimension into the operational structure of the Union, namely domestic, local or sub-regional interests and actors. The Union is interpreted as a multi-level system of governance composed of interlocked arenas for political contest, where direct links are established among actors in diverse political spaces and political domains, where political control is diffuse. European integration can be seen as a distinct West European effort to contain the consequences of globalization (Wallace). It should be noted that as integration extends more and more to global dimensions (globalization), that creates its own issues and needs (global governance). According to the definition of Mihly Simai Global governance is in fact a part of a multi-
level governance system which will retain this forum of states while making room for the growing number of important non-state actors in the worlds economy and politics. From the point of view of European governance it means that it has to take on certain global roles, while on the other hand it is a certain dimension of global governance. XI. Multi-level governance III. The European Commission published a White Paper on future reform of European Governance in July 2001. The main objective of the white paper is to reform and improve the governance system of the Union by the creation of greater coherence among the different policies of the Union, increase the efficiency of these policies, and bring them closer to the citizens. The Commission determines five principles of good governance, which must guide the reforms concerning the improvement of the decision-making and executive system of the Union. These are the followings: 1. Openness: (more open operation of institutions, and more active communication toward public opinion). 2. Participation: (inclusion of the citizen, the different organizations, etc. in the decisions and actions). 3. Accountability: (greater transparency and responsibility). 4. Efficiency: (in terms of both settling objectives and implementation).
5. Coherence: (relevant definition of objectives, and better coordination among policies). These five principles are strengthened and supplemented by two traditional concepts, proportionality and subsidiarity (the chosen measures should be proportional to objectives and the level of action /regional, national or union/ should be appropriately chosen. XII. Some possible theoretical interpretations of international integration I. Obviously, the various schools of integration theory approach the process of unification, and mutual adaptation from different sided and with differing emphases. The various theoretical schools and trends call attention to the important interconnections of integration theory. 1. Integration as a historical process, which cannot be limited to the unification or interconnection of national economies. The modern national states of Europe, in the course of the recent history of the continent, evolved basically from uniting of cities, principalities or provinces. Integration to form a nation is a complex process, and has taken place in very varied ways in different regions of the world (Brazil, the USA, India, etc.); and this applies to integration on the international level, too. On an international scale, integration appears to have been taking place in recent decades within organized, institutional frameworks. One of the most important characteristics of international integration at present is that it can be defined as the voluntary, comprehensive economic and political linkage of sovereign states and national economies. 2. International integration is regarded by most of the theoretical school as a multi-level process. Its
important to make a distinction between the concepts of micro- and macroeconomic integration. Microintegration is a process that takes place between individual actors in re-production, in the form of international production, sales, market, technical and development cooperations or joint ventures. Macrointegration is a process of unification involving the whole society, which takes place between national economies as units. XII. Some possible theoretical interpretations of international integration II. The national economy is ultimately the integration of individual producers and traders, which can be understood as the interlinking of the re-production processes. It is characteristic of the world of the world economy today that company, national, regional and global integration processes are going on parallel with one another; they have reciprocal effects and are interlayered in a comprehensive manner. The economy and economic relations build from below, and the laws of their operation always take effect through the activity of the individual (producer, consumer, entrepreneur, taxpayer etc.). Their attitudes, behaviour and actions are motivated by interest. The individual plays as the chief actor in society and the economy, thats why integration is based on how and in what frameworks the individuals socio-economic activity and life is organized. 3. Integration can be thought of as a process and as a state. In the static sense, economic
integration can be seen as a situation in which the national elements of a larger economy are no longer divided by economic boundaries but function together as a unit. As Bla Balassa points out the integration as a process covers those measures, which aim at eliminating discrimination among the economic units belonging to different national states. XII. Some possible theoretical interpretations of international integration III. 4. Integration is an organic process, which evolves from the rational activity of economic actors and the more efficient operation of the economy. Many think that to regard integration as unification is a superficial and quantitative approach. Qualitatively the tendency to integration is the formation of more highly developed communities or organisms of a higher order and increasing efficiency and effectiveness. In the economic sense this means that increasingly finer and more complex specialization and cooperation on the part of the individual producer and consumer take place, and their social activities are organized into increasingly efficient organisms from the level of direct production (the microeconomic sphere) to that of national economy or world economy (the macro- or megaeconomic sphere). In this context integration is a comprehensive process, which encompasses every area of social, economic, political and cultural life, including individual human relations and macrosocial
relations. 5. International integration is a democratic process. Integration, as unification and interconnection, ultimately leads to the weakening of the given national economy and limitation of its sovereignty. Democracy is a value concept which is accepted by broad masses, and which in the last few decades has become closely associated with the concept and process of European integration. Conclusion For pragmatic reasons, for a long time the literature on integration attached particular importance to the forms of integration, and cost-benefit analysis. In connection with eastward expansion, from the 1990s the question of integration maturity appeared on the agenda. With the development and increasing complexity of the integration process it became more and more necessary to solve the questions of governance. Regarding the content, forms and effect mechanisms of the integration processes a number of theoretical schools have emerged, each emphasizing a different aspect of integration; together they provide a comprehensive picture and ultimately they express the evolution of the process in all its complexity.