Let me start with the European perspective: At the very origin of the European integration project stood the hypothesis that economic integration – and at a later stage also monetary integration – would lead to intensified trade and FDI flows, which would mutually reinforce one another.
Furthermore, the more closely countries are linked through trade and FDI, the more the synchronization of their business cycles will progress. This in turn reduces the costs of a loss of customs and monetary autonomy. All these factors will ultimately lead to higher growth, promote development and stimulate the catching-up process.