President Fernando Henrique Cardoso’s government presided over three critical junctures in the development of the Common Market of the South (Mercosul): the attempted military coup in Paraguay in 1996, the devaluation of the Brazilian real in 1999, and the Argentine economic crisis in 2002. Its responses to these events were critical to the development of Mercosul because of Brazil’s unique position as the largest country in the bloc. Many theories of free trade and regional integration hold that economic integration requires a regionally preponderant power that acts as a core provider of collective goods for member states. When such a power provides benefits, satisfaction among the member states increases and the likelihood of integration is increased. An examination of the Cardoso government’s policies during the three critical junctures suggests that regional integration declined when Argentina incurred costs during the Brazilian currency crisis and increased when Cardoso’s government provided aid during the Argentine economic crisis and helped defeat the attempted coup in Paraguay.
- Regional Integration,
- Fernando Henrique Cardoso,
- power preponderance,
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