## **Box 4: Assessment of the factors required for effective regional cooperation**

**<mark>First, the duration and depth of regional cooperation must be sufficient to make meaningful improvements possible.</mark>** <mark>Concluding a trade agreement is one thing, but persisting in the difficult effort of deepening integration is quite another. Deepening is likely to be needed in order to consolidate benefits over time, but it is also expected to call for contentious structural change. Meaningful regional cooperation requires longterm commitments and a willingness to go into adequate depth on the part of those involved. Depth has to do with the complementary national measures needed to enable countries to contribute to, and absorb, the benefits of transnational cooperation (see below). This is the hard part, more difficult than signing an international agreement and rhetorically committing to the course of action that it implies. Regional cooperation consists of national measures taken in accordance with some agreed international plan. The absence of, or lags in, complementary national measures can bring the best collective action framework to naught.</mark>

**<mark>Second, in the interest of sustainability, losers (or countries that gain less than others from cooperation in a given field) must be compensated to keep the coalition of actors and the pursuit of cooperative solutions alive.</mark>** <mark>Again, this can be very difficult because of the possibility of disagreement over the nature and extent of asymmetries and because of resource constraints.</mark>

**<mark>Third, contracting parties should bind themselves with treaties or agreements that are self enforcing,</mark>** <mark>where this is feasible, because of the absence of supranational authorities capable of exacting compliance. Barrett (2002) shows that the requirement of self-enforcement reduces the number of feasible cooperative solutions.</mark>

_<mark>Source: Adapted from Ferroni (2002)</mark>_

# **5. Addressing commitment challenges in the EIZ**

## **_<u>The distribution of benefits from the EIZ</u>_**

Before outlining possible solutions to commitment, we first summarize the benefits that are expected to flow from the EIZ, and to which groups these benefits are likely to accrue. It is only from understanding the relative winners and losers from a project like the EIZ that one can begin to consider the fiscal and institutional solutions by which to reach compromise.

In Section 2 we outlined some of the benefits that may be created by SEZs, particularly operating in a regional context. Table 1 summarizes these benefit streams and identifies how they are likely to be distributed, particularly across space in the region. Two things become clear from this brief assessment. First, the core will benefit more than the periphery (and to some degree at its expense) in terms of investment and trade flows, at least in the short term. This highlights the importance of the redistributional potential of the EIZ and the need to ensure that solutions are found to facilitate shortterm employment gains for nationals from the landlocked states. Second, that within the core of the EAC, the state(s) in which the EIZ is based will benefit disproportionally. This is good news from the perspective of convincing the host(s) to give up land to the project.

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