International Integration is a financial concept in which countries have an ever greater number of financial transactions, investments & interests outside their borders. Through financial integration, nations become increasingly financially interdependent.
Financial integration is dependent upon the removal of restrictions such as tariffs and trade quotas. Privatization programs, free-trade areas and liberalization policies generally help to reduce these types of restrictions.
Advances in technology have enabled and facilitated international trading and investments. Individuals and governments may now easily gather and analyze foreign financial information as well as search for and complete transactions.
National governments are moving towards international integration in greater strides through the choice of their holdings. The U.S. government, for example, now has billions of dollars worth of assets in foreign currencies as well as billions of dollars worth of foreign liabilities. This makes the U.S. more susceptible to foreign events as well as more financially interdependent.
Political integration may be defined as a cumulative process of change in the nature of relations among more or less sovereign political units, such as states, during which these units voluntarily accept some kind of new central authority.
This process requires at least four constituent elements:
(a) the political units involved must permit the establishment of central institutions which promulgate policies;
(b) the functions of this central authority may not be trivial or vague but must be important and specific;
(c) the functions, or tasks, performed by the central institutions should be inherently “expansive”;
(d) the political units must remain committed to the common enterprise because they perceive ensuing benefits.
Processes relevant to integration
Interaction. It is important, both historically and analytically, to distinguish between processes of interaction among the members of a world society and processes of integration. Clearly, there can be no processes of global integration if there are no processes of global interaction; at the same time, frequent interaction can take place without diminution of the autonomy of the members that could lead to the establishment of a new central authority.
The consequences of this increased interaction on relationships of interdependence are somewhat ambivalent. On the one hand, interdependence, when perceived, at times has been resisted and measures have been taken to counteract it. In recent history some states, or groups of states, have deliberately sought to reduce their dependence on other states of the international system—say, in matters of military security, the exchange of raw materials or finished commodities, etc.—so as to preserve for themselves a higher degree of political maneuverability or to deny advantages to an actual or potential opponent.
Restrictions on international travel and on the free flow of labor across international borders, and restrictive immigration or emigration policies, are other examples of curtailing social interaction with the expected consequence of reducing some type of interdependence.
The hope that global integrative trends would lead to a world society whose members would resolve their conflicts with a minimum of violence is at the heart of the more ambitious proposals for an integrated international system. A key attribute of a highly integrated international system would thus be a central authority endowed with a monopoly of the legitimate use of physical force.