consensus as to which institutions are “best” in any specific domain. Second, even if there are “firstbest” institutional approaches to individual aspects of governing the EIZ, taken together there is no guarantee that these institutional forms will work as effectively as some alternative configuration on the ground. Thus, one option may be to set up a bidding mechanism for the various governance and public service functions inside the zone, with the selection of the preferred bidders made either by the EIZ board or (perhaps better) by an independent selection panel consisting of technical experts.

Regional cooperation must be seen not only from its perspective as a commitment risk, but also as an important institutional mechanism that can in fact help render more binding the various commitments of EAC members. As previously discussed, regional agreements not only raise the prospective payoff from cooperation among members, but critically raise the costs of defection. In the context of regional cooperation agreements, Laursen (2003) outlines the set of institutional requirements needed to ensure commitment of members for different types of issues (see Table 3). In the case of EIZ, the commitment challenge is most likely one involving “co-ordination problems with distributional issues”. In general, the interest of all member states should be broadly aligned (investment attraction, job creation, etc.) but coordination across states may be problematic. Based on this context, Laursen’s model suggests the need for pooling and delegation of sovereignty as well as budgetary means to support redistribution, possibly in combination with sanctions against defection. How might this be achieved in practice?

**Table 3: Nature of issues and institutional requirements**

|**Nature of**<br>**issue**|Conflicting<br>interests / pure<br>conflict|Dilemmas of<br>common<br>interests;<br>temptation to<br>defect|Co-ordination<br>problem with<br>distributional<br>issues|Simple co-<br>ordination<br>problem|Harmony of<br>interests|
|---|---|---|---|---|---|
|**Institutional**<br>**requirements**|Institutions to<br>no avail’<br>convergence of<br>interests<br>required|Pooling and<br>delegation of<br>sovereignty;<br>sanctions<br>against<br>defection|Pooling and<br>delegation of<br>sovereignty;<br>budgetary<br>means|Open method<br>of coordination<br>sufficient|Institution-<br>alisation not<br>necessary;<br>“Parallel<br>unilateral action”<br>sufficient|

_Source: Laursen (2003, p.18); shaded areas by authors identify those most relevant to the commitment issues related to the EIZ._ The example of the EU is particularly instructive in identifying some of the institutional mechanisms that can play a role in gaining commitment from parties. “Pooling of sovereignty” (Moravcsik, 1998) involves member states actually ceding real power over certain issues to regional bodies and accepting binding majority decisions. It relies on the primacy of European law over national law and on the existence of “commitment institutions” (Laursen, 2003) like the European Commission and the European Court of Justice, which enforce this primacy. In the EAC, the precedence of national law and the lack of strong regional legal authority place significant limitations on the potential for EAC institutions to act as a strong, binding force. There may also be limited budgetary means to support redistribution to support regions that may have less to gain or could potentially lose from the EIZ (at least in comparison to the EU model). However, this could potentially be addressed through the distribution revenue streams (taxes 24