University of Denver Digital Commons @ DU Electronic Theses and Dissertations Graduate Studies 1-1-2018 Tides of Cooperation: The Ebb and Flow of Regional Cooperation in Latin America Amaleia E. Kolovos University of Denver Follow this and additional works at: https://digitalcommons.du.edu/etd Part of the International Economics Commons, and the International Relations Commons Recommended Citation Kolovos, Amaleia E., "Tides of Cooperation: The Ebb and Flow of Regional Cooperation in Latin America" (2018). Electronic Theses and Dissertations. 1409. https://digitalcommons.du.edu/etd/1409 This Dissertation is brought to you for free and open access by the Graduate Studies at Digital Commons @ DU. It has been accepted for inclusion in Electronic Theses and Dissertations by an authorized administrator of Digital Commons @ DU. For more information, please contact [email protected],[email protected]. TIDES OF COOPERATION: THE EBB AND FLOW OF REGIONAL COOPERATION IN LATIN AMERICA __________ A Dissertation Presented to the Faculty of the Josef Korbel School of International Studies University of Denver __________ In Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy __________ by Amaleia E. Kolovos March 2018 Advisor: Martin Rhodes ©Copyright by Amaleia E. Kolovos 2018 All Rights Reserved Author: Amaleia E. Kolovos Title: TIDES OF COOPERATION: THE EBB AND FLOW OF REGIONAL COOPERATION IN LATIN AMERICA Advisor: Martin Rhodes Degree Date: March 2018 Abstract Regional organizations have developed into important global actors as they negotiate inter-regional trade agreements, regulate economic policies, and develop international security communities. States have much to gain from such regional cooperation efforts particularly in emerging regions such as Latin America. Such gains can include increased trade and economic relations, enhanced security, attracting external investment, and increasing bargaining power at the international level. With such gains to be had, one might expect states in these regions to regularly cooperate in order to achieve their common interests. However, this is clearly not always the case. Latin America has struggled for decades with an ebb and flow of regional cooperation schemes. Why do we see variation in levels of regional cooperation in Latin America? More specifically, given the potential gains from regional cooperation, why do we see periods of defection within these organizations? Historical cases within the Latin America suggest that regional cooperation suffers under conditions of unequal gains. Asymmetrical distribution of economic gains from cooperation efforts hinder further integration and increase the chance a state will defect from the group’s arrangements. This study uses a mixed methods approach to explore the impact of economic asymmetry on regional cooperation in Latin America. Beginning with a large-N statistical analysis utilizing a cross-nested model to capture variance within and between organizations, it finds evidence that asymmetric distribution ii of investment and trade hinders political indicators of cooperation. Additional in-depth case analysis of the Andean Community and Mercosur further highlight these trends through showing country-specific data and diplomatic statements during periods of major defection within the groups. Based on these findings, this study demonstrates the importance of the distribution of gains expected from regional cooperation efforts as it concludes that increasing economic asymmetry within a region leads to lower overall cooperation among an organization’s member-states. iii Acknowledgements I would like to extend my sincere gratitude to the army of people that helped me through this process. In particular, I would like to thank my committee for their insightful critiques and giving me the space I needed to see my own work more clearly. Thank you for always pointing me in the right direction. In addition, this project would not have been possible without the generosity of Jonathan Moyer and the Pardee Center who shared their amazing dyadic dataset and Mariano Torcal who showed me the true wonders of statistical analysis. I am also forever indebted to my wonderful colleagues and past professors including Birol, Sasha, Christoph, Lucy, and Jason. Thank you for, knowingly or not, providing the inspiration to pursue higher education and the courage to push past major set-backs. Finally, I must thank my family and close friends for their emotional support, tough love, and reminder of what matters most. Thank you especially to Pavlo, Jessy, and Val for keeping me on track. To my father, thank you for being there when I needed you most. To my mother and grandmother, thank you for being a never-ending source of inspiration and examples of what a strong woman can accomplish. Most of all, I wish to thank my supportive and caring husband Mike for his unconditional love and patience. Finally, to Sir Ozzles the dissertating hamster and sassy fur ball who never failed to provide much needed distractions – thanks buddy. iv Table of Contents List of Tables ............................................................................................................... vii List of Figures ............................................................................................................. viii Chapter One: Introduction ............................................................................................... 1 Introduction ......................................................................................................... 1 Background.......................................................................................................... 3 Research Purpose ................................................................................................. 6 Research Objectives and Structure ....................................................................... 9 Chapter Two: Explaining Regional Cooperation ............................................................ 10 Introduction ....................................................................................................... 10 Conceptualizing Regional Cooperation .............................................................. 15 The Importance of Relative Gains ...................................................................... 20 Literature Review .............................................................................................. 26 Conclusion ......................................................................................................... 33 Chapter Three: Methods and Results ............................................................................. 35 Introduction ....................................................................................................... 35 Case Selection.................................................................................................... 37 Measuring Regional Cooperation ....................................................................... 41 Capturing Economic Asymmetry ....................................................................... 48 Additional Independent Variables ...................................................................... 59 Statistical Analysis ............................................................................................. 66 Conclusion ......................................................................................................... 79 Chapter Four: Data Discussion ...................................................................................... 81 Introduction ....................................................................................................... 81 Overview of the Quantitative Model and Findings ............................................. 83 Economic Indicators of Regional Cooperation ................................................... 88 Additional Influences on Regional Cooperation ................................................. 96 Moving into Qualitative Analysis ....................................................................... 99 Chapter Five: The Andean Community – a Tale of Two Exits ..................................... 103 Introduction ..................................................................................................... 103 An Overview of CAN ...................................................................................... 105 The First Exit: Chile ......................................................................................... 111 The Peruvian Exit Threat ................................................................................. 124 Venezuela Jumps Ship ..................................................................................... 132 Conclusion ....................................................................................................... 143 Chapter Six: Mercosur – The Declining Star ................................................................ 146 Introduction ..................................................................................................... 146 An Overview of Mercosur ................................................................................ 149 Mercosur’s Fist Downturn: The Brazil/Argentina Crisis, 1999-2002 ................ 157 v The Beginning of Mercosur’s Decline: The Argentina/Uruguay Crisis of 2006 168 Conclusion ......................................................................................................