Finally, neoliberal institutionalism brings together functionalist and institutionalist approaches, emphasizing the importance of institutionalizing regional integration. Based on the central premise that regionalism is the rational response of governmental cooperation tor solving the problems of an increased regional interdependence, such as the European experience (Deutsch, Burrell, and Kann 1968; Haas 1958; Mitrany 1966). Neoliberal institutionalism is one ot the most dominant approaches to regionalism, marrying epistemologically neorealism and neoliberalism (Keohane 1984; Mansfield and Helen 1997). Neoliberal institutionalism is stronger in its explanation of the relationship between politics and economics than NARP. From the neoliberal institutionalism perspective, politics is shaped and limited by the allegedly “universal” laws of neo-classical economics. Market power thus constrains states, where a globalized economy, dominated by trade and finance, limit development. States thus respond to these challenges through regional trade agreements (trade regionalization), as global and regional economic integration is unstoppable, giving rise to the importance of institutions and regimes (Keohane 1984). Therefore, regional trade agreements constitute the cornerstone of regional public goods as they are part of an incremental problem-solving process, defined by the level of institutionalization and trade complementarity (Soderbaum 2005: 227).
However, three elements mark the central weaknesses ot neoliberal institutionalism. The first is the idea that institutionalization subordinated to the dynamics of trade defines regionalism, based on the regional experiences of the EU, North American Free Trade Agreement (NAFTA), and Asian Pacific Economic Community (APEC). Second, the identification of regionalism as a formal state-led project of integration, which confines the concept ot regionalism and its research to states and governmental agencies, leaving our non-state actors and informal regional powers. Finally, it reduces regionalism to a trade phenomenon where institutions only play a role in creating incentives and constraints to given processes (Soderbaum 2005).
This chapter has questioned how mainstream regionalism theories have limited the development ot other research agendas. The analysis of three perspectives such as Eurocentric regionalism, liberal integration theory, and the actor-oriented North American regional perspective, the adaptation of the Weberian concept “conceptual cages,” demonstrates that such political economy perspectives concerning regionalism and development limit the diversity of concepts and methodological formats that skew the comprehension of other regionalism, such as New South American Regionalism.
One of the main “conceptual cages” of Eurocentric regionalism is the premise that a successful integration process demands the cession of the sovereignty ot the states to that of a supra- regional instance. This vision depoliticizes the historical construction of European regionalism, also concealing political—economic processes inherent in its consolidation. Its limitations are linked to the idea that regionalism should be assimilated and applied as a project based on a statecentric experience in the specific world order. However, this vision does not necessarily fit with other experiences ot regionalism, such as that of South America, where integrationist and regionalist projects have failed in their attempts to achieve a high degree of institutionalization and assignment of sovereignty.
Regarding liberal integration theory, it contains a linear approach that understands integration as a process that takes place in stages of economic growth. Its limitations are linked both to the universalist postulates and the notion of development based on economic neoliberalism.
That is the only formula for regional integration, which has not proven sufficient in the case of South America.
In the case of actor-oriented North American Perspectives to regionalism, they rest on an empiricist epistemology about scientific knowledge, aligned with theories that situate within rationalist understandings of international relations. From this view, a hegemon is required to maintain the status quo and provide tor the economic growth of other actors in the international system, and are necessary conditions tor the existence ot regionalism and greater cooperation. However, this perspective does not explain the dynamics ot New South American Regionalism, its actors, and the endogenous and structural factors that characterize the region.
In the case of institutional neoliberalism, its central premise rests on the importance of institutions and, therefore, on the need to achieve high levels of institutionalization in regional integration processes. Three elements constitute the central weaknesses of neoliberal institutionalism. The first is the idea that regionalism is defined by its level ot institutionalization subordinated to the dynamics ot trade, and based on the regional experiences of the EU, NAFTA, and APEC. Second, that regionalism is a state-led project of integration, which confines the concept of regionalism and its research to states and governmental agencies, leaving out not only strategic areas of analysis but also questions of conflict and well-being. Finally, the reduction ot regionalism to a trade phenomenon where institutions only play a role in creating incentives and constraints to given processes (Soderbaum 2005). Regionalism as a political—economic concept is more comprehensive than regional economic integration, these can be different and even complementary avenues of research.
In conclusion, the main issue with the four dominant paradigms discussed here is how they epistemologically, methodologically, and theoretically limit the generation new concepts, perspectives, and methodologies applicable to the domestic and structural dynamics ot specific regions. Because they have become widely accepted as hierarchical assumptions, they constrain not only research but also the redefinition ot the notions of development in regions, such as South America. These assumptions thus need to be reviewed from a critical perspective in order to better analyze regional configurations, characterized by a context of intensification of globalization processes, trans-nationalization of investments, finance, trade, and the presence of new state and non-state actors in the global arena.