Relational Studies on Global Crises: Online Paper Series No.6 Feb.20 2019

Political and Economic Integration in Crisis: A Theoretical Viewpoint

Hikari Ishido (Professor, Center for Relational Studies on Global Crises)1

Abstract
We take a broad view on the concept of “regional integration” to mean diverse forms ofpolitical and economic relations among nations, and are pushing forward aninterdisciplinary research on the hierarchical and complex nature of these relations. So
far, we have been making efforts to build a theory based on the hierarchical structure of
regional integrations and to conduct research activities to further develop it. Focusing on
the hierarchical structure (macro momentum of regional integration, inter-state regional
integration of meso-level, micro-level industrial/ethnic entities) of regional integrations,such as the Association of Southeast Asian Nations (ASEAN), the Gulf Cooperation
Council (GCC), the European Union (EU) and their intra-hierarchical relationships, weare developing an analytical framework highlighting why these regional integration
efforts are oftentimes put in crisis. There is some empirical evidence showing that if
political and economic interdependence is high, relationships based on regional
integration tend to be solidified; on the contrary, if it is recognized by participating
stakeholders that the claims of their rights (e.g., market access through tariff reduction
and other forms of preferential treatments) are excessive due to the diversity(heterogeneity) of the integration partners, the country will also sharpen its claims ofrights over integration, and as a result, the relationship of regional integration will get
rapidly divided.

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Research assistance from Ms.Yuki Tashiro is cordially acknowledged.

RSGC-Online Paper Series No.6

Political and Economic Integration in Crisis: A Theoretical Viewpoint
Hikari Ishido (Professor, Center for Relational Studies on Global Crises)

1.Introduction
At the A02 study group (Political and Economic Regional Integration) under theongoing 5-year research project in Japan “Grant-in-Aid for Scientific Research on
Innovative Areas (research in a proposed research area) : Relational Studies on Global
Crises” (research period: June 2016- March 2021, and headed by Prof.Keiko Sakai of
Chiba University, Japan), we take a broad view on the concept of “regional integration”
to mean diverse forms of political and economic relations among nations, and are pushing
forward an interdisciplinary research on the hierarchical and complex nature of these
relations. The next section considers the "relationship" in a general form as much as
possible, in accordance with some cases of regional integration. Section 3 makes an
overview of some cases and relationships in and between politico-economic regional
Integration. Section 4 presents perspectives on political and economic sense of regional
integration from the relational perspective and concludes the paper.

2. A Relational Perspective on Regional Integrations
From the latter half of the 1990s regional integration in the political and economic
sense has progressed in line with the global trend, and at the same time, the coordination
function among the countries within the region is shaken as a mechanism of resolving
regional conflicts at socio-economic levels. Regional integration here refers to thephenomenon in which border barriers are reduced and some sort of political and economic

Political and Economic Integration in Crisis: A Theoretical Viewpointties (institutional or informal) occur in regions beyond national borders2. It is essential tograsp the actual state of economic and political integration functions of various regional
integration bodies such as the Association of Southeast Asian Nations (ASEAN) and Gulf
Cooperation Council (GCC), and analyze their economic and political functioning. It
seems that the hierarchical structure of upper system (macro), state entity3 (meso), andsubsystem (micro) will influence each other beyond the layer. Also, how to respond to thecrime and terrorism forming a cross-regional network, how the regional consortium reacts
and seek out a new regional security system, the resonance of the state entity and thesubsystem are also important considerations become.
“Regional integration” based mainly on the nation state became apparent from the latter
half of the 1990s in each field of economics and politics. With the rise of regional
economic integration such as free trade agreement, the meaning of the “Westphalia
regime” centered on the national unit is diminished, and the economic relationship withthe super-national regional economic integration area as the unit is created. Formation of
the regional economic integration zone precedes in Europe and the United States, and the
EU is a representative example. Currently, a wide regional economic integration zone is
rapidly forming in Asia and elsewhere across the globe; various regional institutions such
as ASEAN in Southeast Asia, GCC in Middle East’s gulf region have been establishedwith varying degrees of integration.
In the background of the flow of regionalism, in addition to economic globalizationand deepening of interdependence relations, the adjusting function between countries
Acemogul and Robinson (2012) discuss that the accountable and “inclusive” role of nation states issometimes not attained, thereby leading to the failure of nations.
2“Nations” cannot be placed at the “micro”. Replacing “nations” with the word “(national) leaders” could also be an
option, since the decision of “leaders” is being executed as “pseudo-national decision” yet driven by micro motives.
When we observe from the outside, it seems as if the "state" remains as one solid unit, but in reality it is just a decisionof its "leader", which is the view that the stability of the national policy cannot be premised to be fixed.
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within the region was expected as a security mechanism, that is, as a mechanism forresolving regional conflicts. The EU has developed from the socio-economic communityand has wide-ranging functions such as peace and welfare in the integration entity,international relations, etc., to expand the accession to the former Eastern Europe / Soviet
countries after the Cold War 4 , subject to democratic governance and human rights
compliance I have arrived. And in ASEAN, democratization of member countries and theglobal expansion of democratic norms have advanced economic development as well as
movements for human rights and democracy.
As a way to capture the global society as a system, a hierarchical structure of “macro”,“meso” and “micro” as shown in Figure 1, should be emphasized. In this figure, regional
integration bodies are basically located at the meso level (yet closer to the macro), whilesome regional integrations could be positioned as macro level as “supra-national upper
system”.
Figure 1. Macro, Meso and Micro-level interaction
Macro
Supranational entities, civil society, democracy
level
↑↓
↑↓
↑↓
Meso
level

↑↓
Regional
integrations

Nations
Nations
Nations
↑↓
↑↓
↑↓
↓ ↑↓
Micro
Industry
Ethnic←Heterogeneity→ Firms↓
Sub-systems
level
associationsgroups
Source: Adapted from Keiko Sakai’s original figure.

Focusing on the economic side, regional integration constitutes an economic network,and by the interaction within the regional economic integration area and between theplural regional economic integration zones, the characteristics of the state-based entity
4

As for Cold War, refer to Duara (2013), Fraser (2013), Gleijeses (2017), Iriye (2013), Jackson (2013), Kirby(2013), Plummer (2013), Sayward (2013), Shibusawa (2013), Spaulding (2013) and Stone (2013).

Political and Economic Integration in Crisis: A Theoretical Viewpoint(or “comparative advantage”) Emerges. In analyzing the ASEAN economic policy5 thatinvolve trade in goods and services, innovation through interaction between companies,
and unity in diversity in diversity, each entity such as nation, enterprise, region integrationand their various interactions must be explicitly considered. By closely observing thepatterns and intensities of network connections and analyzing what kind of circumstances
the “critical situation” mentioned above will take place, it is possible to analyze thesuccess or failure of policy formation concerning regional integration and the tradepattern and to analyze the affluent economic environment for innovation is an important
issue. As a methodology, statistical analysis based on large-scale collection of data is also
indispensable. Specifically, the patterns of innovation and trade arising from firm
heterogeneity are not derived from the assumption of “many homogeneous enterprises”
assumed in the current mainstream economics, but statistics of corporate “heterogeneity”
has to be collected through careful field surveys.
As for “relationship of global political economic system”, it seems that solutions toconflicts were oriented “internationally”, which seems to be the main viewpoint of
academic field dealing with global issue so far. For that reason, dealing with so-called“discontinuities” in which “relationships” change drastically, seems to have left it
extraordinarily in the past as an “external event” outside of the system. However, undercircumstances where relationships (conflict, dependence, fluctuation, conversion, and soforth between social members and the manner of subjects (national ideals and distributionof public opinion) themselves change significantly, “relationships affect the manner ofthe subject, and vice versa (causal linkage from subject to relationship) is also true” is5

Carpenter, Alavi and Zulkifli (2013) discuss ASEAN’s role of regional development cooperation for narrowing
development gaps.

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more realistic. Intra- and Inter relationships of regional integration bodies include“confrontation”, “dependence”, “disappearance (constant fluctuation of realization
equilibrium)” between states, “transformation (changes in the characteristics of axes andsubjects of conflict)” and the like. An analytical format that emphasizes interdependent“fields” of macroscopic, meso and micro relation between hierarchical regional
integration as shown in Figures 2 and 3 become important.

Figure 2. Interaction between relationship and subject characteristics

Note: The arrows indicate a causal direction.
Source: Based on the Author’s discussion with Ms.Yuki Tashiro.
Figure 3. An interactive "place" between macro, meso and micro

Note: The arrows indicate a causal direction.

Figure 4 shows an example of a framework for concretely discussing therelationship of regional integration. Arrows in the figure indicate the presence andintensity (expressed in terms of thickness) of influence in each layer and between layers.
In this figure, the meso-level items (national goals and policies) have a great influence on

Political and Economic Integration in Crisis: A Theoretical Viewpoint

the disappearance of regional integration, and at the same time, the regional variation of
public opinion indicated by the microscopic viewpoint (survey result of regional opinion)
Is influencing the transformation of the meso-level national goal and policy (thin arrows
also indicate the location of the causal relationship, although it is relatively small
influence as well). It is a big branch point over the relationship of regional integration).
In analysis of regional integration that emphasizes relationships, it is thought that as muchas possible, causal linkage among hierarchies that progress at the same time should beconsidered.
Figure 4. A framework for analyzing regional integrations
Operator

Hierarchy
Macro

Macro
Proliferation
regional
integrations

Meso

National targets
and policies onregional
integration

Micro

Local
level
difference in theacceptanceofregional
integrationsofOperand
Meso
Changing
national policies
Conflicts among
nation states on
the
issue
of
regional
integrations
Domestic
political
movementinfavor of / against
regional
integrations

Micro
Changing public
opinions toward
regional
integrations
Citizens’
acceptanceofnational targets
and policies
Local
level
conflicts on theissue of regional
integrations

Source: Made by the author.

3. Overview of regional integrations
This section considers the global relationship by some cases of political and economic
regional integration.

3-1.Association of Southeast Asian Nations (ASEAN)
As a result of the establishment of ASEAN (Association of Southeast Asian Nations) in

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1967 in addition to opposing communism 6 , solidarity for security between ASEAN
member states in Southeast Asia was pursued; it also had the purpose of deepening
regional integration for co-prosperity and economic development. The current ASEAN
has intensified economic implications (i.e., cultivating scale economy and efficiency intrade and investment, and securing positive externalities such as an increase in thestability of member states) as a centripetal force of regional integration. In ASEAN,
creation of further economic comparative advantage under the name of AEC (ASEAN
Economic Community) is pursued.
In ASEAN as a regional integration entity, there is ambiguity (fuzziness) overwhether it is politically motivated or economically driven, as mentioned above. In 1976
the Treaty of Amity and Cooperation in Southeast Asia (TAC) was concluded among thefive ASEAN member countries (Indonesia, Malaysia, the Philippines, Singapore, andThailand). It was important to make it comprehensive and “ambiguous” with the use of“Southeast Asia” instead of “ASEAN”. Subsequently, the number of subscribers to theTreaty increased: Brunei became a member in 1984, Vietnam and Laos, in 1992, andCambodia and Myanmar joined in 1995. Then, the characteristics of the subject of
ASEAN as an “anti-communist union” has been changing at least implicitly. It is
important to understand that the core values of regional integration are in “fluctuation”.
Due to the heterogeneity among the state entities that make up the ASEAN, thecentripetal force as a regional integration body is lost, and at the same time, “entropy”(degree of disturbance of the order as a nation) which hinders national integration,
increases. It is also an important property for a regional integration body that can become

6

Concerning communism, see Brown (2014), Fitzpatrick (2014), King (2014), Madsen (2014) and Smith (2014).

Political and Economic Integration in Crisis: A Theoretical Viewpointa situation where it is divided. What are the implications for changes in behavior ofindividuals and companies as a result of regional integration and penetration of financial
capitalism on the political system of the ASEAN countries (Singapore, Malaysia,
Thailand, Indonesia, Philippines) On the political and economic systems of ASEAN
countries and how the domestic political trends will have an impact on the regional orderin East Asia will be the focus of regional integration surrounding ASEAN.
In recent years, the situation surrounding the South China Sea and ASEAN's
correspondence are important for considering the relativeness of ASEAN and nationalsovereignty (vulnerable property maintained only by constant support by both micro andmacro subjects) It is an example. Regarding the territorial rights in the South China Sea,
"heterogeneity" (temperature difference) exists in the ASEAN member countries, and theparties Philippines, as a sovereign state, an international arbitration trial with China over
the South China Sea's territorial rights (July 2016), but the approach to economic
assistance from China to the Philippines is to be received as preferred by "micro" entities
such as industrial associations and political affiliated organizations in the Philippines, anddiscussions on territorial rights Is in compliance with the Philippines side or indeed
shelving status (as of the end of May 2017). In other words, national sovereignty as themain body of the meso is only a relative thing that changes according to the relationshipwith other hierarchies surrounding it. China has limited limitations on maintaining
national sovereignty in the Philippines, and beyond the "critical point" that can be handled
as a nation, China, which seeks to expand national sovereignty, has developed a favorable
relationship with the Philippines in absolute terms It can be made to do.
Also, emphasis is placed on the consensus principle of non-interference principle
of internal affairs at the ASEAN level ("macro" main subject if it is regarded as a super
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national subject and "meso" mainly when considered as an intergovernmental agency) It
is linked causally to the strengthening of the characteristic ASEAN Way 7 to do.
Specifically, attempts to issue a joint statement over the South China Sea as ASEAN have
led to failures many times. And this seems to make it easier for other ASEAN countries
to present the political and economic liberalism colors.
Regional integration body ASEAN has succeeded to a certain extent, but it has limitations
as seen in the situation over the South China Sea above, which also leads to a looseningof the international rule of law in a macroscopic sense As a result, the international codeof conduct around South China is transformed as a matter of fact. Especially since theinfluence of China has strengthened since the 1980s, existing international maritime law
is also urged to "transform" in interpretation and application. This shows that international
norms can be altered by the influence of meso situation.
Also in Malaysia and the Philippines there is a disturbing state (In the Philippines
which was said to be an honor of democracy, under the worsening of relations between
anti-government armed forces on Mindanao Island and government forces, martial law in
the island is 2017 It was laid in May). This is not a coincidence, it happens in the samestructure. The problem of the sovereign ownership of sovereign states (at the meso level)also affects the micro domestic situation.
As seen in the trend of the regional union called ASEAN, the so-called
Westphalian regime (international regime with the sovereign state as the immovable
entity) can only be relative, and a macro-meso-micro relationships change constantly.
When the relationship underpinning them shakes and works in the negative direction, the7Concerning the “ASEAN Way”, refer to Aminuddin (2017), Indrawan (2016) and Thompson (2017).

Political and Economic Integration in Crisis: A Theoretical Viewpoint

sovereign nation regime (in the meso area) also comes to a crisis of dissolution.

3-2. Regional Integration in the Middle East8
It is said that the reason why military intervention by major powers is frequently adopted
as a conflict resolution option in the Middle East is that the intra-regional solution
mechanism has collapsed. It is considered that regional integration bodies can provide
such functions. The elucidation of the instability factor of international relations and thestabilization policy that cuts the regional integration in the Middle East is a meaningfulresearch agenda.
The role played by regional integrations is not limited to closer economic
relations and promotion of democratization. To aim for the elimination of issues(disparities and divisions) in the regional dynamics from the level of the national entity
level, the civil society of the democratizing transition country forms a cross-border
network and is developing diverse activities. Such networks that go beyond theframework of nations involved in regional formation include illegal economic and social
activities including criminal acts, and in response to a wide range of criminal acts such as
drug trade and human trafficking. There are cases where regional integration bodies are
given security-alliance roles. A typical example is the inter-state response to a wide-area
terrorist network, and possibly the GCC, which was an alliance relationship limited to the
Persian Gulf oil-producing countries.
However, it is pointed out that the GCC, which is a type of regional integration
is not functioning as expected of a regional integration. Analyzing changes in the Middle

The description in this section is the result of adding the comments from Prof. Akifumi Ikeda and Dr.
Masaki Matsuo to the relevant part of planning research A02 "Political economic regional integration"
application form.
8

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East regional order mediated by oil and immigrants, is important as the “realities” ofregional integration. The concept of the Middle East refers to geographically dispersed
areas, and “regional integration” in the Middle East is difficult to occur in the first place.
However, there are many countries where “Arabic” is a common language, so domestic
struggle and international struggle are easy to be linked across modern national borders.

3-3. The EU (European Union)9
As is well known in Europe, the huge and pioneering regional integration effort called the
EU is indeed at stake now. What lies behind it is literally the difficulty of this “integration”
project, which is far from the intentions of the citizens of each country, by the global elite.
It would be one-sided to see the movement of the anti-EU as a reaction to nationalism10
led by populism alone.
The phenomenon typically seen in the populism of European countries in recent
years is that “anti-Islam” is the flag head, along with so-called criticism of establishedpolitics. The relation between “Europe and Islam11” has not been put forward as much as
is needed. Moreover, contemporary populism adopts the argument that it puts forward theprogressive idea of gender equality and separation of religion and religion, and criticizes
Islam because of its “anti-European” philosophy. In any case, asking the relationshipbetween “Europe and Islam” beyond the relationship between individual countries andcountries is an important issue of global relational studies. Compared with the trend of
the EU, the integration method presupposing agreement of member states like ASEAN

9Based on Prof. Jiro Mizushima’s comments.
10For origins of nationalism, see, e.g., Benner (2013) and McDougall (2015). Also for the several cases of nationalism

in different areas, refer to Aydin (2013), Chatterji (2013), Eckert (2013), Halliday (2013), Henley (2013), Jaffrelot(2013), Mitter (2013), Roshwald (2013), Scuira (2017) and Sidel (2013).
11
As for Islam, see Krstic (2015) and Motadel (2017).

Political and Economic Integration in Crisis: A Theoretical Viewpoint

seems to be a rather steady integration with less repulsion though it takes time. Multilevel comparisons of regional integrations (e.g., EU and ASEAN) are a fruitful research
topic.

4. Perspectives on political-economic regional integration and relational perspective
In this paper, we make the case for political economic regional integration fromtheoretical perspectives. The relationship between subjects is the central focus. The
hierarchical structure of the global society is a structure in which several layers are nested.
It is at times a good idea to give names to what seems to be the subjects of each level suchas individual → household → ethnic or local government → nation → regional
integration body → supranational system and international norm and discuss theinteraction only within each hierarchy However, there are limitations to capture the realityof the global society with this approach, and it is impossible for various actions and ideas
to be predictable among individuals’ actions, with part of the meso connecting micro andmacro agents. Indeed, interactions (relationships) between hierarchies simultaneously
change the relationship while prescribing the way of the subject. See Appendix for an
attempt to benchmark this situation with just two agents (at micro, meso or macro levels,
depending on the situation at issue).
Particularly in the “mesoscopic” field that exhibit unpredictability, a sudden
collapse of the relationship (catastrophe) occurs unexpectedly, so microscopic
consideration assuming perfect rationality cannot be done. We cannot speak only withmacroscopic overall indicators represented by the average statistical values.
The “inertial force” of the regional integration body (the magnitude of thecentripetal force trying to reach a specific direction as a society) and the “viscous force”
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(such as consensus and sense of solidarity) between the micro- agents are at issue. When
comparing these, if the deviation of the ratio between these two (inertial force divided by
viscous force) exceeds a certain level, the “behavior that missed the normal path” of thesubject that does not try to keep up with the society’s centripetal force (low adhesion withother subjects) becomes prominent. When this leads to a chain reaction, the regional
integration body suddenly shifts from the “normal state” (= laminar flow) to the turbulent
state (= turbulent flow).
As outlined in this paper, as an important feature of a regional integration bodyin recent years, the network of non-state actors together with aspects such as
strengthening economic efficiency, cooperative relations and promoting democratic as awhole are important hierarchically embedded actors. The mechanism of transforming thecharacter of the integration body is non-linear. In grasping the actual state of economic
and political integration functions of various regional integration bodies and analyzing
their economic and political roles, it is important not to focus only on relationships
between state actors, but to develop supranational as well as microscopic perspectives.
Trends in the global society including higher-level systems (e.g., internationalorganizations, civil society, supra-national networks) and subsystems of heterogeneity ofvarious groups within the state entity (e.g., industry groups and companies) , It is
important to see how it affects regional integration among countries.
Understanding regional integrations in the form of "systems with a hierarchicalstructure", as regional integrations (macroscopic) as superior systems, state entities(which may include regional integration as meso, intergovernmental union), sub The
hierarchical structure called system (micro) influences each other across layers. Trends inother hierarchies give instability to the region integration in an unexpected way, and on

Political and Economic Integration in Crisis: A Theoretical Viewpoint

the contrary, promote regional integration in an unexpected manner, and it is necessary to
study it as much as possible through academic and fusion.
As empirical observations suggest, some “tolerance level” and “critical point”
breaking the tolerance exist in the diversity (or heterogeneity) of regional integrations (orsome international entity association as a similar type). This is evident from therelationships surrounding “regional integration” in Southeast Asia, the Middle East andEurope, and the multilayered regional economic integration is the source of the tension
relationship to mutual relations. While economic relationships sometimes promote
regional integration, such as international division of labor by trade and investment, it isimportant to understand the basic value (respect for democracy, human rights),
civilization and religion in terms of civilization and culture make up differences which
could lead to the “critical point” that forms the boundary between stabilization anddestabilization of regional integrations. And at the critical point, “susceptibility (degreeof influence of fluctuation)” is large, i.e., small scale “fluctuation” such as trade friction,
expression of policy support / non-support from industrial organizations, regional
demonstration, could lead to amplification of initial fluctuations. A certain degree ofdiversity in subsystems is expected to have a positive influence on regional integration
among countries as “comparative advantage”, but the diversity to reach a certain “criticalpoint” should be considered more closely. The mechanism of the formation / break downof regional integrations leading to destabilization requesting the emergence of a new
system should be elucidated in both theoretical and empirical terms.
Considering that the critical point of such a relationship is related to capturing
the “crisis” or “catastrophe” of the relationship over regional integration, the nature of
relationships and the interdependence of subjects should be formally expressed.
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Empirically oriented studies focusing on the functioning of regional integration from the
aspects of income, ethnicity, religion, and feedback effects are needed. In addition to
analyzing the relationships concerning the division of regional integration, there is also aneed to identify “singularity” (so-called “focal point” that determines division andintegration of relationships) for improving relationship in and among regional
integrations. Also, the possibility of “intervention” (policy stance including nonintervention) should be brought into research subjects.

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Plummer Brenda Gayle (2013), “Race and the Cold War”, in Richard H. Immerman andPetra Goedde (eds), The Oxford Handbook of the Cold War, DOI:
10.1093/oxfordhb/9780199236961.013.0029, Oxford: Oxford University Press.
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Political and Economic Integration in Crisis: A Theoretical Viewpoint

Appendix. Politico-economic regional integration and relationships: An analysis
from the perspective of complexity12
1. Relationships and politico-economic regional integration
This study considers politico-economic regional integration with a focus on“relationships” at the micro, meso or macro levels 13 . Tariff reductions and the freer
movement of people and investments following regional economic integration are agreed
upon by unequivocally matching requests (claims to rights) and offers (concessions) ofliberalization between two or more sovereign states. Within the sphere of regional
economic integration, companies mutually interact as agents that trade in goods andservices, which influences the formation of regional integration policies and affects theglobal economic environment. Relationships between countries and companies arecomplex; this study surveys economic models of relationships from the perspective ofcomplexity or non-linearity in Section 2. Section 3 considers relationships and the rootsof moral sentiment. Finally, Section 4 looks toward a theoretical construction of societal
relationships.
2. Complexity and economic models of relationships
This section considers the relationships between agents undertaking regional
integration in light of the complexity (or unstraightforward non-linearity) of an actual
society. Adam Smith, considered the father of economics, forms the basis for this analysis;
his studies in economics and ethics were inquiries of moral philosophy to understand how
humans can achieve happiness. Here, however, the “Adam Smith problem” comes tomind. This problem is the question of whether Adam Smith’s depiction of human nature
should be understood as being based on a principle of mutual sympathy (as thought to beasserted mainly in The Theory of Moral Sentiments), as being based on self-interest (asthought to be asserted in The Wealth of Nations), or as a balance between the two concepts.
In summary, “humans, subject to desires and weaknesses, combine the two;” furthermore,community-level relationships also follow both principles simultaneously. Below, I
briefly consider the nature of these relationships.
In relationship-oriented regional integration, there is a predominance of one-nationcentricity, that is, the behavioral principle of seeking greater utility (profit) for one’s own
country. If attention is not paid to the various relationships that exist among the multiple
12

Yuki Tashiro kindly provided help with references to Smith’s writings and in positive psychology inthe production of this paper. Allow me to express my gratitude.
13
The framework presented actually applies to any level (micro, meso or macro) at which “relationships”
between two actors (defined flexibly, depending on the issue area) are in force.

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nation states, companies, and households that constitute regional integration, this regional
integration will be neither peaceful nor mutually beneficial. This section presents ananalytic framework for relationships based on Yoshida (1997). I present an overview
below and conduct a study from the perspective of complexity (non-linearity). If Agent 1(e.g., a nation, an ethnic group, or an individual, as various types of agents may be
imagined) makes a request from (claims a right against) Agent 2, the profit obtainablefrom Agent 2 increases; conversely, if Agent 1 makes an offer to (makes a concession to)Agent 2, Agent 1’s profit decreases. I introduce X12 as a variable indicating measures ofrequests and offers; if X12 is positive, Agent 1 is making a request from Agent 2, and, if
it is negative, Agent 1 is making an offer to Agent 2. Similarly, I introduce X 21 as avariable indicating measures of requests and offers from Agent 2 to Agent 1; a positive
value here means that Agent 2 is making a request from Agent 1, and a negative valuemeans that Agent 2 is making an offer to Agent 1.
The profit obtainable in the relationship between Agent 1 and Agent 2 may be expressed
as U12 as follows:
U12=a11X12+a12X21 (here, a11>0, a12<0).

If slight assertions of rights (requests) are made between agents, the relationship will
not worsen significantly, and if these assertions are within a certain permissible range, therelationship will not deteriorate greatly. However, once these assertions fall beyond thepermissible range, rapid, non-linear deterioration becomes natural. Here, Yoshida (1997)
introduces the variable R to indicate the subjective measure of a relationship, whereby
Agent 1’s subjective evaluation of the relationship with Agent 2 is as follows:
R12=b11X123 + b12X213(b11<0, b12<0).

Next, the distance from the desirable target for the pursuit of profit and for maintaining
the relationship (determined as an ideology according to national principles and ethnic
and religious beliefs) is thought of as follows:＿＿

V12=(U12-U12)2 + (R12-R12)2
Aiming to minimize this value is a viable and optimal action for Agent 1. Following thisPolitical and Economic Integration in Crisis: A Theoretical Viewpoint

behavioral principle, Yoshida (1997) derives viable optimal action curves for Agent 1
under relationship-oriented conditions, as shown in Figure 1, in response to cases in which
the target values for relationships are relatively large (i.e., social stickiness is high). The
curves show a combination of viable optimal actions. As the forms of these curves show,even if Agent 2 starts at Point A and changes the relationship horizontally from offers torequests, Agent 1 will not significantly change their measure of his requests until Point B
is reached. When Agent 2 makes requests beyond the horizontal coordinates of Point B,
however, Agent 1 rapidly switches towards Point C and makes requests from Agent 2.
The same principle applies to Agent 2.
Figure 1: Viable optimal action curves for Agent 1 under relationship-oriented conditions
Measure of request/offer byAgent 1 to Agent 2 (X12)
X12

C

D
●

～

X12

E●
Measureofrequest/offer by
Agent
● B
●
A

2

to

Agent 1 (X21)F

Source: Yoshida (1997), Figure 2-4

Yoshida (1997) discusses relationships between both agents in circumstances in which
Agent 1 and Agent 2 are combined, such as that shown in Figure 2. Here, G, H, I, and J
are the four stable points of equilibrium. Among these, G is the cooperative state of mutual
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concessions (offer-making), whereas J is the oppositional state of mutual assertions ofrights (request-making). H and I are vulnerable states that could easily disappear if either
agent were to raise his own target profit. H or I may disappear if Agent 1 or Agent 2 (thinkof these agents as governments or ethnic groups) changes his target profit level in
response to a political-economic policy change by either agent, resulting in the rapid
destabilization of the relationship between Agent 1 and Agent 2. In other words, a(relationship) catastrophe occurs. Thus, a possible perspective is to view the relationships
between agents as deciding the agents’ identities.
Figure 2: Viable optimal action curves and equilibria for Agent 1 and Agent 2 underrelationship-oriented conditions
Measure of request/offer byAgent 1 to Agent 2 (X12)
G (State in which AgentX112 isunilaterally requesting and～Agent 2 is offering in order to

X21maintain the relationship)

●

H

～

X12

J (“Oppositional” state in
which

both

agentsarerequesting)●

Measureofrequest/offer

byAgent 2 to Agent 1
●
●

G

(X21)
I (State in which Agent 2 is(“Cooperative”

unilaterally requesting andstate in which both

Agent 1 is offering in order toagents are offering)

maintain the relationship)

Source: Created from Yoshida (1997), Figure 2-7

I consider the process of regional integration in a politico-economic sense (e.g., the EU
or ASEAN) as a concrete example. Here, while also mutually maintaining relationships
among themselves, the actors that become members of the integrated unit make mutualPolitical and Economic Integration in Crisis: A Theoretical Viewpoint

requests of each other concerning, for instance, the degree of investment liberalizationand the schedule for reducing tariff rates. Moreover, even in conflicts regarding territorial
sovereignty and self-governance between differing ethnic groups within a nation, agentsare usually observed behaving in such a manner so as to secure their own interests,
regardless of efforts to avoid breaking off relationships as much as possible.14 As a result,
there is a certain real-world applicability to models such as those above; a “relationshipcatastrophe” is prone to occur in states, such as Point H or Point I, in which only one of
the agents asserts a right (makes requests) and the other agent only concedes (makes
offers) for the sake of maintaining the relationship. In such states, the occurrence of an
unforeseen incident, even on a minute scale, risks disturbing or shaking things up,
resulting in the conceding (offering) side running out of patience. After a critical point ispassed, therefore, Points H, I, and so forth eventually disappear. As expected, agents
involved in negotiation should aim for a state of cooperation (Point G in Figure 2).
Another important perspective is viewing relationships as the essence rather than as themeans (Yoshida 1997) or, in other words, emphasizing the relationship rather than
individualistic relations that pit opposition against opposition, following the principle of“an eye for an eye.” 15 However, in practice, states of opposition (Point J) end up
becoming equilibria. Why do such results occur? The following section references theconcept of self-interest discussed by Smith and examines the reasons for the emergenceof oppositional states.
3. Relationships and the roots of the moral feelings of individual people as thesmallest compositional unit of regional integration
Adam Smith argues that the ideal moral sentiment is a state of peace of mind (a normal,
calm mind). Furthermore, the study of ethics is an enquiry for people to gain wisdom,
live correctly according to their consciences, and achieve peace of mind, whereas thestudy of economics is a means for creating the minimum wealth necessary, eliminating
unemployment, and achieving peace of mind. In materially impoverished situations,emphasis is placed on the importance of the accelerator of free competition, and, as longas it does not harm the interests of others, competition based on self-interest should bepermitted. However, at the stage when enough force has been acquired such that
14

It is possible that, as a consequence of disturbances in relationships, the territory between

sovereign nation states may expand and contract. The state of requests and offers between
two sovereign states determines the assignment of territory.
15

Furthermore, Point G is a stable, robust point that does not change greatly from the shape of two
curves.

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economic activity runs by itself, since an economy that gives prominence only to selfinterest in the pursuit of material wealth can also be contrary to happiness, emphasisshould be placed on the importance of the sympathy principle as a brake (control function).
Specifically, in Adam Smith’s moral philosophy, the moral principle of sympathy and theeconomic principle of self-interest have been considered as one principle.
Here, Smith’s viewpoint of the “impartial spectator,” that is, that “God is watching evenwhen no one else is,” which appears in The Theory of Moral Sentiments, amounts to
sympathy towards, and the internalization of, external standards. Furthermore, in Part III
of The Theory of Moral Sentiments, self-interest and self-care are included among the
aspects that may be controlled by a sense of duty. Smith writes that “Nature [has not]abandoned us entirely to the delusions of self-love” (The Theory of Moral Sentiments, Pt.
III, Ch. 4). Namely: Smith believed that self-interest (i.e., the pursuit of one’s own
interests alone) must be controlled according to a sense of duty and, indeed, should becontrollable. Moreover, in The Wealth of Nations, Smith accepts economic activity withfree competition based on self-interest. As long as each agent has a right to existence,
there are limits to how far one can continue making concessions (make offers to others);
furthermore, Adam Smith’s laissez-faire approach to the division of labor only approvesof the pursuit of self-interest insofar as it also benefits others.16
Shared values such as the “principle of sympathy” are often considered to be deeply
rooted in religious beliefs. Buddhism, for instance, is widely followed in regions
researched by the present author, such as Bhutan and Myanmar; under the tenets of
Buddhism, controlling desires, being tolerant in relationships with others, and actively
pursuing happiness are understood to be found in mutual relations that are neither too
distant nor too close (Aoki, Ishito, and Kawashima 2010). The socio-moral implicationof this principle is also linked to paying adequate attention to relationships with others.
Here, Smith did not think of societal order as something willed by humans; rather, hethought that societal order was designed by nature and that humans behaved merely under
the guidance of the “invisible hand” of nature. Thus, the division of groups of people into
societal orders is the effect of the various feelings found among humans. Of course,
humans are always able to deviate from general rules. Specifically, humans possess both
wisdom (i.e., a certain rationality) and weakness (e.g., feeling fear), and, as a result of thisweakness, humanity still has yet to witness the realization of a complete societal order as
willed by nature (Dōme 2008:66-67), even when taking blocks of regional integration as
16

Accordingly, if the “America First” policy of the Trump administration (inaugurated on January 20,2017) is interpreted as the prioritization of US interests regardless of any reduction in the profits of others(other nations), the policy cannot be interpreted as valuing the maintenance of relationships with othernations.

Political and Economic Integration in Crisis: A Theoretical Viewpoint

examples.
Due to the limited rationality of human agents, the normal state of relationships in
human societies is that priority is granted to short-sighted impulses caused, for example,
by the fear of potentially losing one’s job in a free market or the weakness of being unable
to withstand such a fear. Fear and uncertainty are both subjective and tend to increase as
they become less rooted in specific things. The fear of death, the polar opposite of feelingsof happiness (Smith, 1817:8), is an essential aspect of human agents; surely, many
revisions can be made in post-Smith economic studies that presume complete humanrationality and have value standards biased towards efficiency alone.
The mainstream economist Joseph Stiglitz, who received the Nobel Prize for
Economics in 2001 for his contribution to information economics, published a coauthored paper “On the Impossibility of Informationally Efficient Markets” in amainstream economics journal (Grossman and Stiglitz, 1980) and asserted that “humans
are not completely rational and only behave based on limited information; accordingly,
points of equilibrium in markets in practice are not necessarily able to satisfy evenbenchmarks of efficiency.” It may be that mutually recognizing the need to harbor positive
hope, regardless of its immeasurability, could also lead to better socioeconomic relationsin practice.17
In actual communities, individual differences arise (Anthony and Manfred 2007:387),
and, indeed, an individual may also undergo changes in religion or mentality (Anthonyand Manfred 2007:385). In other words, there is complexity in society, and it has been
pointed out in the study of positive psychology that disturbances may be seen in theintensity and direction of behavior in a society, with motivations behind human behavior
being the cause (Anthony and Manfred, 2007:530). Preserving fundamental value
increases profit at the micro level of the agent; at the same time, maintaining relationships
with others also leads to increases in profit at the macro level of the community. Indeed,
maintaining relationships with others truly does appear to form the basis of human
psychological happiness. Although there may be a need to distinguish between differing
standards for micro-level happiness and happiness in a macro sense (or welfare standards),
the thoughts and beliefs (including religious views) of individuals do spread, are linked
to community-level thoughts, and develop into choices of economic structures, politicaldemonstrations, military interventions over territorial issues, and terrorism. It goes
without saying that it is important to build social relationships based on positive feelings
amid limited rationality and incomplete information.
17

Yūki Tashiro (specialist in psychology) kindly provided guidance on the relation between hope andhappiness.

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4. Building a theory of social relationships
The field of complexity science analyzes the relationships between the many agentsthat form a society; from the perspective of this field, it is possible to posit the concept ofa “critical point” in the societal sense of the related relationships at the community level,
as considered in this study. Multilayered (stratified) economic regional integrations ofcommunities in Southeast Asia, such as ASEAN (Association of Southeast Asian Nations),
RCEP (Regional Comprehensive Economic Partnership), and TPP (Trans PacificPartnership), provide mutual sources of tense relations. Since any differences in religion,
thought, and core values (e.g., democracy and respect for human rights) are deeply rooted
in the identities of the communities in question, this phenomenon can easily reach thecritical point that forms the border between stabilization and destabilization. Further, at
this critical point, sensitivity (i.e., the degree of influence of disturbances) is high, andsmall-scale disturbances, such as trade frictions, expressions of political support or nonsupport from industrial groups, regional protests, and so forth, may expand towards
system-wide disturbances. A certain degree of sub-system diversity can be assumed tohave a positive effect on the regional integration between nation-states as a comparativeadvantage, but when the degree of diversity reaches a critical point, this diversity is linked
to the destabilization of the system of regional integration in question, and it leads to calls
for the creation of a new system.
Lastly, I consider the meta-theory of stratified structures and relationships. A stratified
structure is a structure in which several strata form a nest; in the social sciences, thegeneral rule is to apply names to the agents in each strata (e.g., individual → household→ ethnicity or regional government → nation-state → integration of nation-states →ecosystem) and to then discuss the interactions within these strata. There are limits to thisapproach, however; there are “meso” parts that link the micro and macro, and, even within
the individual level, various emotions, ideas, and so on greatly and unpredictably
influence behavior.
Chaotic meso areas that involve unpredictable matters allow for neither micro studies
that assume complete rationality nor discussions with only macro, whole-picture
indicators, as typified by average values; there is a need to discuss relationships in a waythat goes beyond the relationship between each agent and that freely associates with thesemicro and macro levels.
In scientific analyses of fluids, such as water, discussion has developed around the
Reynolds number, defined as inert forces divided by viscous forces. Specifically, it has
been suggested that the critical Reynolds number, observed at the point at which a fluid’s

Political and Economic Integration in Crisis: A Theoretical Viewpoint

normal smooth flow (also called laminar flow; the relationship with neighboring liquid
particles is smooth) turns into the turbulent flow that accompanies disorderedrelationships (i.e., when the relationship with neighboring liquid particles is unpredictablycomplex), is a universally fixed number for fluids (Sakaguchi, Kusano and Suetsugu
2008).
In societal relationships, the circumstances are extremely complicated. Nonetheless,one could consider the existence of a so-called societal Reynolds number, that is, anattempt to contrast the inert forces of the whole society (i.e., the magnitude of thecentripetal force moving society in a certain direction) with the viscous forces between
agents on the more micro strata that make up the society (i.e., the forces that provides asense of societal solidarity); perhaps, once the distance between the measures of theseforces exceeds a fixed level, agents who choose not to follow the centripetal force of thewhole society (i.e., agents who have low stickiness with other agents) start to noticeably
exhibit behavior deviating from the norm, and the state suddenly shifts from a normal
state (laminar flow) to a disturbed state (turbulent flow).
This notion is not limited to discussions surrounding regional integration, as aspects
such as income, ethnicity, and religion could be interpreted similarly. When there are low
viscous forces between agents at a certain stratum, the societal Reynolds number is higher,
and once this number exceeds a critical point, a turbulent flow state is reached in the upper
strata, which ends up being expressed in the form of migration, refugees, terrorism,
economic crises, and so forth. Societal inert and viscous forces are deeply related. The
inert force of a “one nation first” approach may end up being cut off at a point at which
the stickiness (i.e., the ties between businesses and industrial and citizen groups that forma nation state) is weak; this situation can be seen directly in, for instance, the example of
the Trump administration in the US, inaugurated on January 20, 2017, and the results of
the Trans-Pacific Partnership, as well as in the state of disputes surrounding the correctionof domestic income gaps. Going forward, more specific research should be conducted on
the relationships between agents taking into account the stratified natures of the micro,
meso, and macro levels in terms of regional integration and taking as case studies theregional integration surrounding ASEAN, for instance, and the possibility of East Asian
regional integration between Japan, China, and South Korea.
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