The experience of the last half-century shows that while regional cooperation schemes are significantly shaped by interests, ideas and identities, institutions are equally important for sustaining the process. The institutional architecture and its impact on governance has now become a staple in the study of domestic political systems. This was not so in the 1970s and 1980s when formal institutional structures were regarded as less important than understanding the dynamics of competing group interests and cross-cutting identities within a society. But now that good governance has become a critical issue of focus for practitioners and scholars alike, there is a renewed emphasis on institutional factors. Failed states and democratization have both pushed the concerns about institutions to the top of the academic and policy-making community's agenda because of the widespread belief that institution building is a vital prerequisite for good governance.

What applies at the domestic level is also applicable at the regional and global levels. The concern for institutional strength is reflected in the ongoing debates about the need for reforms in the structure of international organizations like the United Nations. Some regional organizations are also engaged in the task of refurbishing their existing machinery to suit new conditions. It is in this context that the benefits and shortcomings of the formal machinery of regionalism are discussed here.

Our discussion begins with a short comparative sketch of EU and ASEAN institutions. It then moves on to some of the formal and informal mechanisms within ASEAN and SAARC, including the role of summit meetings, the secretariat and the secretary general's role, revenue and funding, and external linkages of these associations. It concludes with suggestions for managing the institutional shortfalls in the two Asian regional arrangements. The focus is no doubt narrow but relevant and what is offered here is a flavour rather than a full recipe. The chapter also deals with inter-sub-regional initiatives, comprising states from South and Southeast Asia as well as sub-regional cooperation in the form of growth triangles.