The international relations of Southeast Asia in the 1950s and 1960s were deeply influenced by a complex interaction between three fundamental forces: nationalism, the process of the decolonization and the advent of the Cold War . The main outcome of this was the achievement of only limited national and regional autonomy by the Southeast Asian states. Nationalism had spurred a search for self-reliance and autonomy. However the weakness of the nation-state, and intraregional divisions caused by both
federalism has been strongly influenced by the geo-political context in which it originated; namely, the federal systems of North America. This has led to problems relating to its extension to other cases, especially to the nation states of Europe and Asia. A simple example refers to the assignment problem. Fiscal federalism theory (see, for example, Musgrave 1961; Olson 1969) dictates that responsibilities should be assigned according to the equivalence principle, or that the jurisdiction responsible
ideologies and policies. It is a process that promotes the formation of regions. In today’s context, the likelihood of inter-state conflicts in Southeast Asia is greatly reduced, but not totally removed, as it can be seen that there is still some issues on the demarcation of maritime borders with regards to the South China Sea. In Southeast Asia, the internal conflicts are becoming the greatest obstacle in terms of integration and development as it is affecting the regional stability within the