AN ABSTRACT OF THE THESIS OF Ronald Owen Bailey for the ...

AN ABSTRACT OF THE THESIS OF

Ronald Owen Bailey

in

for the degree of Master of Science

Agricultural and Resource Economics

Title:

presented on

June 19, 1975

STRUCTURAL ANALYSIS OF NATIONAL ECONOMIES UNDER ECONOMIC

INTEGRATION:

THE LATIN AMERICAN EXPERIENCE

Abstract approved:

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The Latin American Free Trade Association (LAFTA) and the Central

American Common Market (CACM) were formed in the early nineteen

sixties as a means of economic integration.

The theory of economic

integration has concentrated on determining the impacts of the integration process on the integration unit taken as a whole, but not the

impacts on the individual member countries.

This thesis uses data

from the Latin American experience to explore the issue of the impact

of integration on growth, given individual economic characteristics

as members enter into an integration unit.

The specific objectives of this study are:

(1) to define a set

of characteristics which describes the economic growth of the members

of the economic integration units under consideration; (2) to establish how the influence of these characteristics on growth is affected

by the integration process; (3) to examine the effects of integration

on economic growth; and (4) to determine if the impact of integration

is predetermined by the state of the individual member countries'

economies as they enter into the integration process.

Fifteen Latin American countries were analyzed for a 22 year

period, 1950-1971.

A linear regression model related 14 national

economic structural variables and two national product deflators to

the annual percent change in gross national product, both before and

after integration.

Equations that reflect effects of the structural

characteristics on the countries' growth rates show a significant

impact from the introduction of the integration process into the

national economy.

atory factor.

Integration by itself was not a significant explan-

However, integration in coniunction with the structural

characteristics of individual countries did have significant explanatory value.

This tends to substantiate the thesis that integration is not a

uniform process but rather that its impacts on individual countries

vary significantly, depending upon individual economic structures.

Based on the analysis, it would appear that continued progress of

economic integration may depend on equitable compensation to members

of the community which were adversely affected by the integration

process.

This study provides a foundation for further work needed to

accurately measure the impact of integration on member's growth such

that adequate compensation can be affected and integration progress

insured.

Structural Analysis of National Economies

Under Economic Integration:

The Latin American Experience

by

Ronald Owen Bailey

A THESIS

submitted to

Oregon State University

in partial fulfillment of

the requirements for the

degree of

Master of Science

Commencement June 1976

APPROVED:

-¡öiw-

Assistant Professor of Agricultural and Resource Economics

ff

Head of Agricultural and Resource Economics

Dean of Graduate Schoo/L

Date thesis is presented

-

Typed by Susan Moore Steele for

June 19, 1975

Ronald Owen Bailey

ACKNOWLEDGEMENTS

The author wishes to express his gratitude to Dr. James B. Fitch for

advice and direction in the development of this thesis, particularly in

providing the understanding of constraint necessary for manageability in

a thesis of this scope.

Appreciation is extended to Dr. Richard E. Towey,

Dr. Timothy M. Hammonds, and Dr. Frank S. Conklin whose continued

encouragement and help made this project enjoyable.

Gratitude is also extended to Dr. B. Hughel Wilkins for his guidance

and to my wife, Terryll, whose economic enthusiasm insured the integrity

and completeness of my presentation.

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