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Helping Them In Order to Help Itself: The Capacity of Brazilian Regional Power in the Development of Mercosur
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Helping Them In Order to Help Itself:
Brazilian Regional Power in the Development of Mercosur
Gaspare M. Genna
Assistant Professor
Department of Political Science
Winona State University
Winona, MN 55987
USA
## email not listed ##
Taeko Hiroi
Ph.D Candidate
Department of Political Science
University of Pittsburgh
Pittsburgh, PA 15260
USA
## email not listed ##
Abstract
Do larger trade partners incur a larger share of the cost associated with establishing or
perpetuating free trade arrangements? A key assumption found in many free trade theories states that larger trade partners are willing to incur disproportionate costs because they expect that the benefits from cooperation outweigh its costs. In addition, their larger size gives them the greater capability to take on these costs. Therefore, they help their partners in establishing a free trade area in order for them to help themselves achieve greater benefits from free trade. The implication is that successful economic integration requires a regionally preponderant power that acts as a core provider of goods. However, this assumption has not seen much light by way of empirical testing. We propose to test this by using the case of the Common Market of the South (Mercosur) with specific attention to Argentine-Brazilian relations. In this paper, we examine two episodes of economic crises involving Mercosur member-countries: the 1999 devaluation of the Brazilian currency, the real (1999), and the 2002 devaluation of the Argentine peso (2002). Evidence shows that Argentine-Brazilian economic integration declined when Argentina incurred costs during the real devaluation but improved when Brazil provided aid during the peso devaluation.
Comments Appreciated; Please Do Not Cite Without Prior Permission
Paper prepared for presentation at the 45th Annual International Studies Association Convention, Montreal, Quebec, Canada March 17-20, 2004
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| | Authors: Genna, Gaspare. and Hiroi, Taeko. |
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Helping Them In Order to Help Itself:
Brazilian Regional Power in the Development of Mercosur
Gaspare M. Genna
Assistant Professor
Department of Political Science
Winona State University
Winona, MN 55987
USA
## email not listed ##
Taeko Hiroi
Ph.D Candidate
Department of Political Science
University of Pittsburgh
Pittsburgh, PA 15260
USA
## email not listed ##
Abstract
Do larger trade partners incur a larger share of the cost associated with establishing or
perpetuating free trade arrangements? A key assumption found in many free trade theories states
that larger trade partners are willing to incur disproportionate costs because they expect that the
benefits from cooperation outweigh its costs. In addition, their larger size gives them the greater
capability to take on these costs. Therefore, they help their partners in establishing a free trade
area in order for them to help themselves achieve greater benefits from free trade. The
implication is that successful economic integration requires a regionally preponderant power that
acts as a core provider of goods. However, this assumption has not seen much light by way of
empirical testing. We propose to test this by using the case of the Common Market of the South
(Mercosur) with specific attention to Argentine-Brazilian relations. In this paper, we examine
two episodes of economic crises involving Mercosur member-countries: the 1999 devaluation of
the Brazilian currency, the real (1999), and the 2002 devaluation of the Argentine peso (2002).
Evidence shows that Argentine-Brazilian economic integration declined when Argentina
incurred costs during the real devaluation but improved when Brazil provided aid during the peso
devaluation.
Comments Appreciated; Please Do Not Cite Without Prior Permission
Paper prepared for presentation at the 45th Annual International Studies Association Convention,
Montreal, Quebec, Canada March 17-20, 2004
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