Prior research on a regional leader’s role in the deepening of regional integration assumes that economic power translates directly into political capabilities. Relative political capacity among states is central to the creation and deepening of regional integration since it is this capacity that smoothes out the transition from a closed to an open economy. Should a state have low levels of this capacity but desire openness, it will partner with regional leaders given the leaders’ higher relative political capacity. However, the leaders’ subsidy of a partner’s capacity comes at a price. The leaders would trade political capacity for forming a regional bloc along its preferences. A partner will join with a regional leader so long as it is satisfied with the leaders’ preferences. By doing so, it reduces the cost of the subsidy. Our analysis of European integration indicates that French and German relative political capacities are an important factor in the continent’s unifying efforts by conditioning institutional homogeneity and capital stocks mobility, both of which are critical for political and economic union. However, the German effect contrasts with the French effect in that we discover greater German effectiveness in mitigating potential barriers to integration.