Regional Integration behind the Border: Applying a Value Chain Approach

This paper outlines a methodology for assessing the cost of internal and external obstacles affecting the performance of the value chains serving local producers in developing countries as a means of identifying high impact interventions that would contribute to the country's successful integration into regional and global markets. The objective is to create a single measure of the effect of such barriers in order to illustrate the value of examining internal reforms (i.e., those steps essential to regional integration "behind the border") as well as export barriers in developing a regional integration strategy that makes sense in the context of the accelerating integration of global markets. The methodology employed uses tools applied by global firms in assessing their own operations and in making critical sourcing decisions. This paper was presented at Latin America/Caribbean and Asia/Pacific Economics and Business Association (LAEBA)'s 5th Annual Meeting held in Singapore on July 15th, 2009.