INSTITUTIONAL MECHANISMS OF ECONOMIC INTEGRATION

Lela Jamagidze

INSTITUTIONAL MECHANISMS OF ECONOMIC INTEGRATION

Lela Jamagidze

Doctor of Economics, Associate Professor, Ivane Javakhishvili Tbilisi State University

Abstract

Research goal. The goal of the paper is to examine the institutional mechanisms of economic integration through the lens of their regional differences. It also aims to assess the challenges and opportunities related to the sustainability of economic integration from the perspective of a small open economy such as Georgia. The study discusses the models of institutional mechanisms developed by major integration groupings and the external driving forces that affect their transformation. It demonstrates that flexible institutional arrangements, which countries increasingly prioritize under contemporary conditions, facilitate the redistribution of adjustment costs and support the development of economically viable forms of regional and global economic cooperation.

Methodological approach. To identify how the specific features of institutional models determine the depth of economic integration, the study employs comparative institutional analysis, while historical analysis is used to assess the evolution of institutional mechanisms. Based on qualitative research, the paper examines policy and strategy documents of major integration groupings, as well as reports reflecting their economic outcomes. Quantitative methods are used to analyze indicators of the functioning of economic integration, such as trade interdependence and measures of institutional development.

Key findings and application. Despite increasing pressures on regional integration arising from growing trade uncertainty, the transformation and fragmentation of global supply chains, and the weakening of multilateral trade rules, economic integration remains highly relevant for small open economies. In particular, Georgia should rely on economic integration mechanisms in order to identify new opportunities for engagement in global value chains, intensify its linkages, and further develop and strengthen trade links with large markets such as the European Union and China. The findings can inform national trade and integration policy-makers while considering the features of institutional models when designing relations with major integration groupings.

Keywords: economic integration, international trade, trade rules, institutional mechanisms

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Published Date:

11/01/2026

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