Equitable distribution of benefits in integration schemes among less developed countries, the Andean group

The Cartagena Agreement of the Andean Group customs union (Bolivia, Chile, Colombia, Ecuador, and Peru) includes several measures bearing on this problem. The paper provides a theoretical analysis of the benefit distribution problem, and an evaluation of the benefit distribution provisions of the Cartagena Agreement. Consideration is given to the definition of an "equitable" benefit distribution, some problems in measuring net benefits, and the presumptions as to whether benefits are likely to be equally or unequally distributed in integration schemes. A number of schemes which have been proposed and/or adopted to achieve equitable benefit distribution are then examined from a theoretical viewpoint. The measures contained in the Cartagena Agreement are analyzed in the light of this examination and of the experience of other integration schemes with the benefit distribution problem.