This dissertation examines the relationship between cultural processes and political institutions. Scholars have studied culture either as a prerequisite of state formation or as an instrument of the state. Little research has been done focusing on the role of culture in the creation of political ideas, such as a transnational block. Further, there is a need to understand the way ideas, as cultural products, become institutionalized. This study focuses on the articulation between center and local (borderlands) practices and discourses in the creation of a transnational block in the Southern Cone, Mercosur, from 1985 to 2000. It analyzes the processes of production, selection and institutionalization of ideas that give meaning to Mercosur in the center and in the borderlands. This study also challenges theories that explain the construction of a common market as a top-down process, directed by central elites. Rather, this study shows that peripheral practices and discourses, specifically border discourses, shape the construction process. Further, it disputes Shils (1972) claim that in modern society center and peripheral discourses have become more integrated. Based on information from interviews and from systematic archival research in newspapers and other printed materials, this study compares the processes of cultural innovation originated in three Argentinean border cities -- Posadas, Paso de los Libres and Concordia-- with Buenos Aires as the center of power. It shows that, despite the relative lack of institutionalization at the national level and beyond the sore relationship between Argentina and Brazil governments, people who live in the shared borderland between these two countries are taking cross-border actions in order to consolidate the regional block. Unlike Shils' theory, this dissertation shows that in modern societies, borderlands have an autonomous position in regard to the center, and that can constitute a prolific source of cultural innovation.