Articles of Volume 1, Issue 2

Patterns of Regional Integration in Europe and North America: Insights from Incomplete Contracting Theory

Hendrik Spruyt



This article uses incomplete contracting theory to shed light on hybrid sovereignty arrangements, such as those that occur with regional integration. It clarifies why some regional arrangements progress far beyond the original intent of the member states, while others remain limited to implementing the original accord. Because the European Union started as an incomplete contract with supranational delegation it has developed significantly further than the North American Free Trade Agreement which originated as a complete contract based on intergovernmentalism.

Keywords: incomplete contract, regional integration, European Union (EU), North American Free Trade Agreement (NAFTA)

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