Why have many regional organizations, such as ASEAN, Mercosur and SADC, adopted EU-type common markets and customs unions? I propose the mechanism of frame diffusion—the process by which a cognitive schema that originates in one organization shapes decision making over institutional choices in other organizations—to account for the spread of a specific institutional form across structurally diverse contexts in the absence of outside imposition. The argument is developed in three steps. First, I contend that existing arguments of international economic cooperation and regional market building drawn from International Political Economy, Neofunctionalism and Realism are largely indeterminate in terms of the specific institutional form that such cooperation takes. Second, I posit that developments in Europe and North America in the 1980s and early 1990s acted as a catalyst for the emergence of a set of frames that depicted ambitious regional market building as an appropriate institutional solution to challenges in international competitiveness. These guided policymaking in other regions under conditions of negative externalities and uncertainty. Third, I illustrate this argument in an exploratory comparison of institutional change in three ‘most different’ regional organizations: the Association of Southeast Asian Nations, Mercosur and the Southern African Development Community. The presented argument has implications for research in International Political Economy and comparative regionalism.