Regionalization of Latin America based on asymmetries in the absorptive capacity of countries

Abstract

Latin America has a rich history of regional integration agreements with no sustained success. Onepossible explanation is that these agreements mainly depend on political considerations and do not have a solid basis at the level of private agents. Opposite to the previous literature on regionalism, a method founded on asymmetric economies is proposed in this work. Based on the identification of sources and manifestations of asymmetries, a club clustering proposal of countries is provided. The study involves 67 variables, 20 countries from Latin America, and a period between 1985 and 2008. The results reveal that the existing agreements are not based on the countries´ asymmetries, then, the achievement of a successful continental integration is unlikely under the current circumstances.