Week 11 Summaries
Barbara Koremenos, Charles Lipson, and Duncan Snidal, "The Rational Design
of International Institutions," International Organization 55:4 (2001),
Why do international institutions vary so widely in terms of such key institutional
features as membership, scope, and flexibility? The authors endeavor
to answer this question through a “rational design” framework in which international
actors are goal-seeking agents who make specific institutional design choices
in order to solve the particular cooperation problems they face in different
issue-areas. Five features of institutions are considered: membership,
scope, centralization, control, and flexibility. The authors draw on
rational choice theory to develop a series of empirically falsifiable conjectures
to explain institutional variation in terms of four independent variables
that characterize different cooperation problems: distribution, number of
actors, enforcement, and uncertainty.
Some constructivists argue that institutions play a vital independent role
in spreading global norms. But it is misleading to think of international
institutions solely as outside forces or exogenous actors; they are the self-conscious
creations of states, interest groups and corporations. On the other
hand, institutions are not empty vessels of state power as some realists
maintain. States rarely allow international institutions to become
significant autonomous actors, but institutions do affect outcomes.
This is why states fight over institutional design, especially since institutions
cannot be changed swiftly or easily to conform to changing configurations
in international power.
The authors define international institutions as explicit/public arrangements,
i.e. agreements, negotiated among international actors that prescribe, proscribe,
and/or authorize behavior. They consider institutional change the overriding
mechanism guiding the development of international institutions. The
authors’ primary purpose is to explain institutional design. In this
effort they develop a set of theoretically based conjectures:
- restrictive membership increases with the severity of
the enforcement problem and uncertainty about preferences;
- membership increases with the severity of the distribution
- scope increases with the number of actors and the severity
of the distribution and enforcement problems;
- centralization increases with the number of actors, the
severity of the enforcement problem, and uncertainty about behavior or the
state of the world;
- control decreases with the number of actors;
- asymmetry of control increases with asymmetry of contributors;
- control increases with uncertainty about the state of
- flexibility increases with uncertainty about the state
of the world and the severity of the distribution problem;
- flexibility decreases with the number of actors.
These “rational design” conjectures are evaluated empirically in other articles
of the Fall 2001 issue of IO, including Prof. Kydd’s piece on trust and NATO
Andrew Kydd, "Trust Building, Trust Breaking: The Dilemma of NATO Enlargement,"
International Organization 55:4 (2001), pp. 801-828.
Koremenos, Lipson and Snidal conjecture that the conditions of membership
in international institutions will grow more restrictive as a response to
uncertainty about state preferences. When states are uncertain about
the motivations of other states, they will demand costly signals of reassurance
before being willing to cooperate fully. Andrew Kydd argues that membership
criteria will act as a signaling device – states more committed to cooperation
will be willing to meet the criteria, whereas those less committed to cooperation
(or who have exploitative motivations) will not. The recent enlargement
of NATO to include the former Warsaw Pact members Poland, Hungary, and the
Czech Republic illustrates this logic. The potential candidates for admission
had to meet standards with respect to democratization, civilian control over
the military, and the resolution of border and ethnic disputes with neighbors.
These criteria served to identify the more cooperative potential members
and to encourage cooperative behavior among those who aspired to membership.
However, NATO enlargement came at a price. Although trust was built
and cooperation fostered between the Eastern European states that gained
membership, trust was broken and cooperation harmed between NATO and Russia.
This outcome represents a dilemma that arises in the expansion of a security
community: while expanding the security community enlarges the zone of peace
and mutual trust, it may generate fear among those still on the outside who
view it as a potentially hostile alliance.
The most common models of alliances are the public goods provision games
that have often been applied to the issue of NATO burdensharing. Another
important type of alliance model focuses on signaling and deterrence, where
a defending power is interested in demonstrating its resolve to defend an
alliance partner in order to deter an attack. Constructivists argue
that NATO expansion should be seen as a process of international socialization,
propagating a set of constitutive norms and values to aspiring new members
of the community (i.e. democracy, liberty and the rule of law). The
author argues that none of these approaches explains the dynamics of NATO
enlargement because benefits and costs having to do with trust, mistrust
and cooperation are at the core of the NATO enlargement dilemma – the goal
of enlargement is to foster trust among the new allies and enhance stability;
the unwanted side effect is to lessen trust with Russia. The author
presents a game-theoretic analysis of this dilemma and analyzes the conditions
under which it arises.
Kydd defines a state’s level of trust for another as its estimate of how
likely it is that the other is status quo oriented, rather than revisionist.
His model involves the players west (W), east (E), and a set of n potential
allies. The game is divided into three stages: one where the west decides
whether to offer a security guarantee to the potential allies, the second
where the potential allies play a multilateral “trust game” with each other
in which they cooperate or defect, and the third where east and west play
a bilateral trust game. The author describes the structure of the game
and then analyses the equilibria (see pp. 812-21).
The model shows that enlargement poses a dilemma when the levels of trust
are middling, and hence the level of uncertainty about preferences is maximized,
both between the potential new members and between the community and the
outside power. Under these circumstances, expansion with a high price
of admission is useful in sorting out the cooperative from the non-cooperative
states, and yet potentially damaging to NATO-Russia relations. However,
if the criteria are restrictive enough, conditional expansion may actually
be reassuring, because it tells the Russians that NATO is not interested
in unlimited expansion and that the stated explanation for expansion (the
stability motive) is probably correct. Thus with adequately restrictive
membership criteria, NATO enlargement can be both beneficial in fostering
cooperation among the allies and not too harmful or possibly even beneficial
for NATO-Russian relations as well, eliminating the dilemma.
Koremenos, Lipson, and Snidal’s rational design conjecture that restrictive
membership increases with uncertainty about preferences is supported by Kydd’s
model. In terms of policy implications, the model suggests that the
next round of NATO expansion take care not to dilute the membership requirements
already established. The criteria should be made more stringent rather
than less in order to maximize the potentially reassuring effect of restrictive
membership criteria on those left outside the alliance.
B. Peter Rosendoerff and Helen Milner, “The Optimal Design of International
Trade Institutions: Uncertainty and Escape,” International Organization
55:4 (2001), pp. 829-857.
Almost all international trade agreements include some form of “safeguard”
clause, which allows countries to escape the obligations agreed to in the
negotiations. For instance, GATT/WTO specifies the conditions under which
a government can grant relief to an industry from import competition, and
industries then have the option of choosing which mechanism to file their
complaints under. On the one hand, such escape clauses are likely to erode
the credibility and the trade liberalizing effect of the agreement. On the
other hand, they enhance the agreement’s flexibility. When is such flexibility
optimal for states signing an agreement? What are its consequences?
The key factor that renders escape clauses desirable is the presence of
uncertainty. In each period the political pressure for protection at home
(and/or more open market abroad) is subject to a shock. This shock is any
exogenous and unanticipated change in the state of the world (such as price
or supply changes, technological change, political change) that affects domestic
firms’ demand for, or ability to lobby for, protection of their markets.
Escape clauses are an efficient equilibrium under conditions of domestic
uncertainty. When political leaders cannot foresee the extent of future domestic
demands for protection at home/open markets abroad, such clauses provide
the flexibility that allows them to accept an international agreement liberalizing
In the presence of exogenous shocks, international institutions may be much
better served by allowing states to make temporary use of escape clauses (i.e.
defection) and pay a cost for doing so. With escape clauses cooperation is
deeper and more likely and international trade institutions are more durable.
The penalty for using the escape clause has great importance. It may take
several forms. For instance, countries using GATT’s escape clause must negotiate
compensation with the affected exporter of face equivalent retaliation from
him. Paying a cost is necessary, or else the escape clause will be invoked
all the time, thus vitiating the agreement. An optimal penalty is one that
balances the need for as much cooperation as possible, while allowing some
flexibility in times of domestic political pressure. Te penalty should not
be too high or it will eliminate any flexibility and make the system unstable;
but it must also not be too low or it will render cooperation ineffective.
In equilibrium the negotiating parties adopt an escape clause with moderate
The need for escape clauses may vary between different types of regimes.
It may well be that unanticipated shocks are far more damaging for democratic
leaders than nondemocratic ones, since in democracies negatively affected
groups mobilize against the incumbents in election periods. Thus democracies
are more likely to be proponents of escape mechanisms. The need for escape
mechanism may also vary by issue-area. It is widely believed that trade is
an issue area where governments face domestic uncertainty that has significant
costs. The same is true in the macroeconomic area. For instance, fixed exchange-rate
systems may be especially vulnerable to unanticipated pressures to devalue,
and thus we see escape clauses in many fixed exchange-rate systems. In other
noneconomic issues, domestic uncertainty is less pervasive and less consequential.
For instance, the public and interest groups are less involved in arms control.
Thus escape clauses will be less important and less used.
According to Fearon, as the shadow of the future lengthens, both states
choose tougher and tougher bargaining strategies and the agreement will be
harder to conclude. However, the inclusion of escape clauses may reduce this
dynamic. That is, if in future periods players can deviate, pay a penalty
and return to cooperation, the escape clause may mean that their initial distributional
bargaining is not so important. The pattern of distributive gains agreed
upon today may be altered in the future through the use of the escape clause.
Therefore, inclusion of an escape clause may make agreements easier to conclude
Robert O. Keohane, After Hegemony. Princeton: Princeton University
Press, 1984. Ch.9.
Chapter 9: “The Incomplete Decline of Hegemonic Regimes”
The author makes critical assessment on the explanatory
power of (crude) hegemonic stability theory in accounting for changes in
international economic regimes between the mid 1960s and early 1980s. He
argues that hegemonic stability theory cannot explain causal relationships
in changes of international economic regimes on trade, monetary cooperation,
and oil production.
Although U.S. economic power declined between mid-60s
and early 80s, international cooperation in the three areas (trade, money,
and oil) were either maintained or enhanced. Despite of devaluation of dollar
and the collapse of Bretton Woods system, strong continuity remained in the
principles underlying international monetary regime. In trade, average tariff
levels among states were lower in 1983 than in the mid-60s, due to successful
multilateral rounds of trade talks. In certain areas such as textile and
apparel, cooperation was maintained - although not necessarily from benign
motives. In world oil supply, formation of OPEC did not mean a new hegemony
of OPEC replacing large oil companies, and new patterns of cooperation (and
discord) emerged as the old company-centered oil regime changed. International
Energy Agency (IEA) was established under American leadership, and it worked
as an insurance regiome by establishing internal procedures to share the
costs of an oil supply disruption and thereby reducing the risks faced by
If crude theory of hegemonic stability is to retain its
explanatory power, it must be able to explain the differences in degree of
change in the three regimes (the oil regime experienced the most serious
changes, followed by money and trade) as well as complex general pattern:
why a spiral of collapses was avoided and new patterns of cooperation emerged
among countries, despite the old hegemonic international regimes were weakened.
Keohane's conclusion is that although there are some causal linkages between
the decline of American hegemony and the deterioration of international cooperation
in the world political economy since the mid-1960s, the linkages are not
as direct and simple as the theory suggests. The issue-differentiated theory
of hegemonic stability makes some contribution in understanding changes in
the regimes. However, it is only in oil regime that hegemonic stability theory
can explain both overall trends and processs by which changes took place.
In trade and international monetary regimes, hegemonic stability theory is
less useful in accounting for their decay. One reasons is because the theory
cannot take account of domestic political pressures, but hegemonic stability
theory is also inadequate as a systemic theory because it does not consider
the role played by international institutions. The prospect of discord creates
incentives for cooperation, and in trade and money, international regimes
have been sufficiently well developed to facilitate a good deal of cooperation.
States value the rules and principles of international regimes because they
provide a framework for cooperation. For example, trade regime facilitated
cooperation by reducing transaction costs, limiting the legitimate strategies
available to actors, and providing information in a relatively symmetrical
Lisa L. Martin, “Interests, Power, and Multilateralism,”
International Organization 46:4 (Autumn 1992), pp.
The article addresses the question of whether a rational, self-interested
state “ever see instrumental value in multilateral norms” and institutions.
In other words, it treats multilateralism as a means, not a goal, and inquires
“into the instrumental value of multilateral norms under different configurations
of state interest, i.e. in different types of cooperation problems.” Thus
it explores “the comparative utility of multilateralism and alternative organizational
forms” in view of different possible scenarios “of state power and interests
in particular issue-areas”. The roles of multilateralism are examined in
three separate points in the cooperation process: reaching a decision; the
scope of the decision; and the implementation phase.
Two types of multilateralism are analyzed and defined: (1) Institution
of Multilateralism (IM) – refers to the norms of multilateralism
and is constituted of the following three principles: indivisibility (e.g.,
a collective arrangement whereby an attack on one is an attack on all); nondiscrimination
(i.e. all parties will be treated similarly); and diffuse reciprocity (i.e.
quid-pro-quo arrangements that are not specific to a single issue-area);
(2) Multilateral Organizations (MO’s) – are formal organizations
with more than two members.
Under the assumption that different problems will require different norms
or organizations to cost-effectively address them, four types of cooperation
problems are examined:
(1) Collaboration problems –situations in which equilibrium
outcomes are suboptimal” (e.g., the prisoner’s dilemma or PD). Resolving
these problems requires a mutual policy adjustment since both players have
to move away from the suboptimal equilibrium. Since collaboration problems
contain an incentive to defect, a cooperation enhancing mechanism should focus
on maintenance. That implies that there is a role for formal organizations
(MO’s) that will monitor and increase the ‘shadow of the future’ and less
of a role for conventions alone (IM). Moreover, norms such as ‘diffuse reciprocity’
are not conducive to the enactment of tit-for-tat strategies that may be
the most efficient devices for enforcing trade agreements. In sum, “IM will
appear weak in collaboration cases, while MO should be strong…(although these
MO’s will be weak on IM).”
(2) Coordination problems – a game that has two possible
equilibrium outcomes, “one of which is preferred by each of the players…
once an equilibrium has been established, whether by convention or by agreement,
neither player has an incentive to defect from it.” Coordination games do
not require strong institutions at the enforcement stage (e.g., MO’s), instead
it could benefit from norms or principles (e.g., IM’s) that will reduce the
costs of arriving at cooperative outcomes. The author notes that an alternative
to the IM route is for a single powerful state to credibly determine the
(3) Suasion problems – unlike coordination and collaboration
problems, suasion reflects a condition of significant asymmetry of interests
among states. “In this situation smaller states have a strong incentive to
free-ride, knowing that public goods… will nevertheless be provided.” Therefore
the hegemon will have to persuade or coerce others to cooperate. The most
likely strategy of the hegemon would be “tactical issue linkage” which will
take the form of threats or promises in other issue-areas in order to achieve
cooperation. IM may provide cover to help smaller states justify their decisions
to domestic audiences but will have little real impact on actual decision-making.
MO’s, on the other hand, “may facilitate the dominant state’s attempts at
issue linkage” and will be able to provide to the hegemon information regarding
other state’s behavior.
(4) Assurance problems – in such a game the only preferred
outcome is mutual cooperation since its equilibrium is Pareto-superior and
should easily become a focal point. This is valid under the assumptions that
states are rational (i.e. that they can behave as unitary actors) and that
they have complete information. Thus, governments may need assurances that
they understand the intentions/preferences of the other side and that they
are behaving rationally. The most efficient solution for that lies in transparent
domestic political arrangements (as in democracies). IM can encourage such
transparency and formal organizations may be inefficient in the case of
democracies. However, in the absence of transparent political processes
they can serve as an information conduit.
Multilateralism under hegemony - The benefits of multilateralism for a
hegemon are: lower transaction costs (the maintenance of IM is lower than
other organizational form), lower maintenance costs as a result of fewer
challenges to the actions of the hegemon (e.g., less rebellions to quell),
increased stability under conditions of changes in relative power. The hegemon,
however, will achieve such benefits at the cost of losing some power over
decision-making and a decrease in distributional benefits. The choice between
unilateralism and multilateralism depends on the discount rate: “the longer
the time horizon, the more attractive multilateralism.” However, if a specific
high priority issue is at stake, unilateralism will be more effective.
Institutional changes overtime may affect the levels of cooperation. For
example, changes in the distribution of power will threaten cooperation in
suasion games (since the maintenance of the equilibrium depends on the hegemon’s
ability to promise/coerce states to cooperate). In another example, increasing
discount rates will not be conducive to cooperation in collaboration games
(since the incentives to defect rise). Other exogenous factors that might
affect the cost-benefit calculus of states include technological innovations
and changes in transparency of domestic political processes.
Abram Chayes and Antonia Handler Chayes, “On Compliance,” International
Organization 47:2 (Spring 1993), pp.175-205
This article deals with the issue of state compliance with international
agreements of high political salience in fields such as security, environment,
economics etc. The authors argue that when nations enter into such agreements,
they adjust their behavior according to the terms of the agreements and
“comply with the undertakings they have made.” (p.176) How and why states
comply with these agreements has been the core of an important debate in international
The article explores certain propositions so as to frame its main argument:
The general level of compliance with international agreements cannot be
empirically verified. The authors provide some reasons why they think
the background assumption of propensity to comply is plausible and useful.
Compliance problems do not reflect a deliberate decision to violate an international
undertaking on the basis of a calculation of interests.
Treaty regimes should not be held to a standard of strict compliance but
rather to a standard of an overall “acceptable” compliance.
As far as the first proposition is concerned, indeed it is hard to empirically
validate the normative position that “almost all nations observe almost
all principles of international law and almost all of their obligations almost
all of the time” (Henkin, quoted on p.177). Equivalently, it is equally hard
to validate the realist position that states observe their treaty obligations
only to the extent that it is in their best interest to do so. “Anecdotal
evidence abounds for both the normative and the realist propositions, but
neither of them in their general form is subject to statistical or empirical
proof. The difference between the two schools is not one of fact but of
the background assumption that informs their approach to the subject…A critical
question for any study on compliance is which background assumption to adopt
and that question is to be resolved not on the basis of whether the assumption
is true or false but whether or not it is helpful for the particular inquiry.”
Since the authors’ interest in this work is in improving the prospects
for compliance with treaties both at the drafting stage and later, it makes
more sense to focus on the institutional and political mechanisms that bear
the burden of efforts to enhance treaty compliance. The realist analysis
focusing on a narrow set of externally defined interests i.e. maintenance
or enhancement of state military and economic power is not very helpful
in that regard. Thus in a work that constitutes a study of the methods by
which compliance can be improved it appears more reasonable to assume the
general propensity of states to comply with their international obligations.
The authors then proceed to note some of the chief considerations that lend
plausibility to such an assumption.
Efficiency: Efficiency dictates considerable policy continuity.
In areas of activity covered by treaty obligations, the alternative to costly
recalculation of costs and benefits is to follow the established rule.
Organizational theory would also suggest compliance with the law.
The presumption is in favor of following the rule, i.e. the status quo.
Interests: The assertion that states carry out treaty
commitments only when it is in their interest to do so implies that commitments
are somehow unrelated to interests which is actually not the case. A state
need not enter into a treaty that does not conform to its interests.
“The treaty as finally signed and presented for ratification is therefore
likely to be based on considered and well developed conceptions of national
interest that have themselves been shaped to some extent by the preparatory
and negotiating process… If issues of non-compliance and enforcement are
endemic, the real problem is likely to be that the original bargain did
not adequately reflect the interests of those that would be living under
it, rather than mere disobedience.” (p.183)The shape of the substantive
bargain will be affected by the parties’ estimates of the costs and risks
of their own compliance and expectations about the compliance of others.
Norms: Pacta sunt servanda: i.e. treaties are legally
binding on the states that ratify them; “yet the realist argument that
national actions are governed entirely by calculation of interests…is essentially
a denial of the operation of normative obligation in international affairs.”
(p.185) This stance according to the authors “is increasingly being challenged
by a growing body of empirical study and academic analysis…The strongest
circumstantial evidence for the sense of an obligation to comply with treaties
is the care that states take in negotiating and entering into them…the enterprise
makes sense only on the assumption that as a general rule states acknowledge
an obligation to comply with agreements they have signed.” (p.186-7)
Varieties of Non-complying Behavior:
Ambiguity and indeterminacy of treaty language: Treaty language
like other legal languages comes in varying degrees of specificity; the
broader and more general the language, the wider the permissible interpretations.
More often than not there will be a considerable range within which parties
may reasonably adopt differing positions as to the meaning of the obligation.
In absence of an authoritative arbiter discourse among the parties often
in the hearing of a wider public audience is an important way of clarifying
the meaning of the rules.
Limitations of the Capacity of parties to carry out their undertakings:
According to classical international law, legal rights and obligations run
between states, and the object of the agreement is to affect state behavior.
Even when only state behavior is at stake, the issue of capacity may arise
when the treaty involves an affirmative obligation. An example of
this are environmental treaties that aim at regulating the behavior of non-state
actors carrying out certain activities e.g. producing SO2. In essence,
the state will have to establish and enforce a full-blown domestic regime
designed to secure the necessary reduction in emissions. Developing
countries lack the requisite scientific, technical bureaucratic and financial
wherewithal to build effective domestic enforcement mechanisms. The Montreal
Protocol (on chlorofluorocarbon consumption) is the first treaty under
which the parties undertake to provide significant financial assistance
to defray the incremental costs of compliance for developing countries.
The temporal dimension: Wise treaty drafters recognize
at the negotiating stage that there will be a considerable time lag after
the treaty is concluded before some or all of the parties can bring themselves
into compliance. Whether or not the treaty provides for it, a period of
transition will be necessary. The effort to protect human rights by
international agreement may be seen as an extreme case of time lag between
undertaking and performance. Although the major human rights conventions
have been widely ratified, compliance leaves much to be desired. It is apparent
that some states ratified the treaties without any serious intention of abiding
by them. But it is also true that even parties committed to the treaties
had different expectations about compliance than with most other regulatory
treaties. Nevertheless, “..it is a mistake to call these treaties merely
“aspirational”…they embody ideals of the international system but like other
regulatory treaties the were designed to initiate a process that over time,
perhaps a long time, would bring behavior into greater congruence with those
ideals…these expectations have not been wholly disappointed. The legitimating
authority of these instruments was an important catalyst of the revolution
of the 1980s against authoritarian regimes in Latin America and Eastern
Europe and continues to spark demands for democratic politics elsewhere
in the world.” (p.197)
Acceptable Levels of Compliance: The objective should
not be to get all to obey but to contain deviance within acceptable levels.
“What is an acceptable level of compliance will shift according to the type
of treaty, the context, the exact behavior involved and over time…the acceptable
level of compliance would vary with the significance and cost of the reliance
that parties place on the others’ performance.” (p.198) The meaning
of the background assumption of general compliance is that most states
will continue to comply even in the face of considerable deviant behavior
by other parties.
What is acceptable in terms of compliance will reflect the perspective
and interests of participants in the ongoing political process rather than
some external scientific or market validated standard. If there are no objective
standards by which to recognize an acceptable level of compliance, it may
be possible at least to identify some general types of situations that
might actuate the deployment of political power in the interest of greater
compliance. The foregoing discussion reflects a view of noncompliance as
a deviant rather than expected behavior and as endemic rather than deliberate.
It shifts attention to sources of noncompliance that can be managed by routine
international political processes. Thus, the improvement of dispute
resolution procedures goes to the problem of ambiguity; technical and financial
assistance may help cure the capacity deficit; and transparency will make
it likelier that over time national policy decisions are brought increasingly
into line with agreed international standards.
George Downs, David M. Rocke, and Peter N. Barsoom,
“Is the Good News about Compliance Good News about
Cooperation?” International Organization 50
Downs, Rocke and Barsoom argue that the good news about compliance in international
regulatory regimes is not necessarily good news about cooperation because
the policy inferences of “managerialists” are plagued by endogeneity and
selection problems. The authors conclude that a high rate of compliance
is often the result of states formulating treaties that require them to do
little more than they would do in the absence of a treaty, and in cases where
noncompliance does occur and where the effects of selection are attenuated,
both self-interest and enforcement play significant roles.
The “managerial” school is a group of mainly qualitative political scientists
interested in international law. Their research on compliance in international
regulatory regimes has argued (1) that compliance is generally quite good;
(2) that this high level of compliance has been achieved with little attention
to enforcement; (3) that those compliance problems that do exist are best
addressed as management rather than enforcement problems; and (4) that the
management rather than the enforcement approach holds the key to the evolution
of future regulatory cooperation in the international system. Managerialists
assert that compliance problems that do occur, rather than being the result
of violations or self-interested attempts at exploitation, are more often
the result of (1) the ambiguity and indeterminacy of treaties, (2) the capacity
limitations of states, and (3) uncontrollable social and economic changes.
The key point made here is that instances of apparent noncompliance are
problems to be solved, rather than violations to be punished. Strategies
necessary to induce compliance and maintain cooperation thus involve (1)
improving dispute resolution procedures, (2) technical and financial assistance,
and especially (3) increasing transparency. The managerial school has
a generally optimistic view of international cooperation when compared to
realists or cooperation researchers in the rational choice tradition, who
emphasize the centrality of enforcement concerns in mixed-motive games where
the danger of self-interested exploitation is significant (as opposed to
coordination games where it is not).
A treaty is an endogenous strategy; states choose the treaties they make
from an infinitely large set of possibilities. States will rarely
spend a great deal of time and effort negotiating agreements that will continually
be violated. This inevitably places limitations on the inferences
we can make from compliance data alone. The authors argue that the
basis of state selection needs to be controlled for, and do so with their
concept of “depth of cooperation”: the extent to which the depth of an agreement
captures the collective benefits that are available through perfect cooperation
in one particular policy area, i.e. the extent to which an agreement requires
states to depart from what they would have done in its absence.
The authors argue that the deeper an agreement is, the greater the punishments
required to maintain compliance (in mixed motive games). The authors
present examples from post-1945 US arms control and the Montreal Protocol
limiting CFC emissions to support their assertion that managerialist inferences
about the unimportance of enforcement are contaminated by selection.
They provide other examples, including the Uruguay round and WTO enforcement,
and the deepening of European integration, to demonstrate that more demanding
levels of cooperation require reducing the likelihood of self-interested
exploitation by member states. Finally, the authors evaluate the managerialists’
causes and solutions for noncompliance (see above) in light of the Washington
Naval Treaty of 1923 and the General Agreement on Tariffs and Trade (GATT).
They argue that these cases provide counterexamples to the prescriptions
of managerial theory because of the evident importance of enforcement (or
the lack thereof).
Further progress in international regulatory cooperation will necessitate
new agreements that present far greater incentives to defect and require
greater levels of “deep cooperation” than those currently in place.
This is because agreements involving more demanding environmental standards,
fewer non-tariff barriers, steeper arms reductions, etc., will represent
more serious departures from what states would do absent an agreement.
One possible strategy is to restrict regime membership to states that will
not have to defect very often so that members can set and enforce a deeper
level of cooperation.
Anne-Marie Burley and Walter Mattli, “Europe before the Court: A Political
Theory of Legal Integration,” International Organization 47 (Winter
1993), pp. 41-76. Plus responses by Geoffrey Garrett and Mattli/Slaughter,
International Organization 49:1 (Winter 1995), pp. 171-190.
Burley and Mattli (BM) argue that the European Court of Justice (ECJ)
was an "unsung hero" in the transformation of the Treaty of Rome (1958)
into a constitution, "laying the foundation for an integrated European economy
and polity" (41-2). BM find both the political and legal literatures
on the ECJ to be unsatisfactory: most legal scholarship sees the law in a
political vacuum, "hermetically closed to considerations of power and self-interest",
and even contextualists like Weiler fail to specify the relationship between
law and politics. On the other hand, political scientists, and especially
realists, have tended to overlook the role of the ECJ. BM apply the
neofunctionalist model of political integration, going back to Haas (53ff),
to study the role of the ECJ in the integration of the legal sector.
Legal integration, their dependent variable, is defined as "the gradual [i.e.,
through incremental spillover] penetration of EC law into the domestic law
of its member states"; the independent variables are "supranational and
subnational actors pursuing their own self-interests within a politically
insulated sphere" (43, 54-6). BM consider the law as "a mask for politics",
a language and logic for debating and deciding political outcomes, a domain
that "could never be completely separated from the political sphere but would
at least provide a sufficient buffer to achieve results that could not be
directly obtained in the political realm." (44, 72) Because the legal
domain is in this way shielded from "the interplay of direct political interests"
integration is more likely to occur: judges can successfully advance a "pro-integration
'political agenda'" so long as they are perceived as retaining legitimacy
within the supposedly apolitical domain of the law (57, 69-73). Seeking
to enhance its own power, the ECJ created the community legal system by
creating opportunities for individual litigants, lawyers, and national courts
to advance their interests by participating in its business (60-5).
BM interpret the Maastricht Treaty (1993) as a legally-formulated attempt
to check spillover effects that constitutes an acknowledgment that the ECJ
did have "the power to pursue its own agenda." (74) Finally, BM conclude
by pointing to larger debates about rationalist and "reflectivist" understandings
of the role of institutions (such as an autonomous legal realm like the
ECJ) in IR theory (75).
Garrett's main argument is that the legal order created by the ECJ is
accepted by national governments because it reduces contracting and monitoring
costs associated with trade liberalization (172). In his response
to Burley/Slaughter and Mattli (henceforth SM), Garret argues that SM are
wrong to dismiss his 'neorationalist' account of legal integration.
He takes issue with their claim that even powerful national governments accept
the authority of the ECJ and adhere to its rulings because they are expressed
in apolitical and technical legal terms (173). In contrast, Garrett insists
that the ECJ and the legal order it created was accepted by national governments
because it suits their interests. Their acceptance of ECJ rulings reflects
not submission but the preferred strategy of rational self-interested actors
which derive general benefits from trade liberalization that outweigh the
short-run domestic costs of accepting adverse decisions. Garrett bases
his claim on an analysis of the German government's calculations in the landmark
Cassis de Dijon case of 1979. He concludes that the Germans accepted
an adverse ruling because the domestic cost of allowing French imported liquor
was very low, while there were benefits to signaling a commitment to free
trade externally and a will to protect more vital sectors (e.g. public utilities)
domestically (175-6). Moreover, Garrett asserts, more or less powerful
national governments react differently in rulings involving more or less important
economic sectors (see figures on 177, 179). In their subsequent riposte,
SM dispute Garrett's interpretation of their original point. Their
argument was not that states acted irrationally or that the legal system is
inherently against their interests, but that during its incremental construction
of the system the ECJ "was able systematically to override member states'
true preferences as perceived by individual states at the time and was able
to impose constraints on the ability of those states to fight back (184).
SM demonstrate that Garrett's interpretation of the German government's willingness
to comply in the Cassis case because of the minor importance of the industry
in question is flawed because seven years later the court ruled against
the much more important beer industry in a similar case, and Germany complied
(188). The basic problem with Garrett's argument, SM conclude, is that his
conception of state preferences is insufficiently specified (184, 188-9),
and his inaccurate account of the decision-making process in the legal realm
Paul Pierson, "The Path to European Integration: A Historical Institutionalist
Analysis," Comparative Political Studies 29:2 (April 1996), pp.
Paul Pierson argues in "The Path to European Integration" (1996) that
intergovernmentalist and neofunctionalist explanations of the effect of member
states on European Community (EC) integration do not fully explain the evolution
of EC institutions, and introduces an argument of path dependence, or historical
institutionalism, as a complement to the admitted central role of member-states.
Intergovernmentalism and its primary theoretical adversary, neofunctionalism,
look only at "snapshots" of time, and thus do not theorize the strong independent
causal effect of prior decisions and institutions on present decisions.
Pierson paraphrases the intergovernmentalist viewpoint as positing European
integration as "the practice of ordinary diplomacy under conditions creating
unusual opportunities for providing collective goods through highly institutionalized
exchange . . . the EC is essentially a forum for interstate bargaining.
Member states remain the only important actors at the European level. Societal
actors exert influence only through the domestic political structures of
member states. . . . each member state seeks to maximize its own advantage"
(124). Pierson cites Garrett (1992) and Moravcsik (1993) as foundations of
the intergovernmentalist perspective, and Lange (1993), Martin (1993), and
Moravcsik (1991) as examples of intergovernmentalists debating among themselves.
Pierson defines neofunctionalism as "showing how spillover processes
and the autonomous actions of supranational actors (including the Commission
and European Court of Justice) contribute to European policy making" (125).
Pierson relies in part on neofunctionalist arguments in his historical institutionalism,
but states that his historical institutionalism is distinguished by its
longue duree viewpoint.
Pierson describes historical institutionalism thus: "The crucial claim
I derive from historical institutionalism is that actors may be in a strong
initial position, seek to maximize their interests, and nevertheless carry
out institutional and policy reforms that fundamentally transform their
own positions (or those of their successors) in ways that are unanticipated
and/or undesired. Attempts to cut into ongoing social processes at a single
point in time produce a "snapshot" view that is distorted in crucial respects.
Central parts of my analysis emphasize temporal aspects of politics: the
lags between decisions and long-term consequences, as well as the constraints
that emerge from societal adaptations and shifts in policy preferences that
occur during the interim. When European integration is examined over time,
the gaps in member-state control appear far more prominent than they do in
intergovernmentalist accounts" (126). The three main historical institutionalist
factors that affect member state preferences, bargaining power, and ultimately
new outcomes are sunk costs, accumulated policy constraints, and heavily
discounted or unintended effects, all summarized in graphical form (149).
Pierson's discounted effects argument is that member-state politicians heavily
discount future payoffs, and so care little for effects that their current
bargaining positions/outcomes have on the future payoffs of their member
(Historical institutionalism is in contrast to functionalism, which theorizes
that institutions evolve through some form of "efficient historical process",
i.e., that institutions evolve towards a unique functional solution.)
Pierson uses three case studies to illustrate his theory, all related
to European social policy. European social policy is an ideal case because
member states have been the most resistant to yielding control of social
policy to EC institutions. Thus it can be argued that what control has been
yielded is more likely to be inadvertent. Much of EC attempts to legislate
social issues have included high rhetoric and low execution. The three
cases are gender equality, workplace health and safety, and the Maastricht
Explaining one of these three areas should be sufficient as an illustration
of historical institutionalism, and so I explain his argument on the evolution
of EC gender equality bargaining, as well as his related discussion of
occupational pensions. Pierson writes, "The EC has assumed a central role
in the development of policies to promote gender equality. It is clear
that member states did not seek this outcome. Rather, the EC's extensive
role must be considered an unintended by-product of the Community's original
institutional design" (150). During negotiations over the Treaty of Rome,
Germany and France strongly disagreed on how much social policy to include
in the treaty. France wanted to harmonize social policy across member states,
and Germany wanted social policy diversity. In order to satisfy the
French, the Germans finally agreed to include Article 119, which required
member states to "ensure and maintain the application of the principle
that men and women should receive equal pay for equal work." All member
states considered Article 119 merely hortatory, and it lay dormant for
almost two decades. When the preferences of states changed in the early
1970s due to high social democratic sentiment and women's movements, politicians
used Article 119 in 1978 as a foundation for actually harmonizing this
important area of social policy across member states by passing power over
women's workplace issues to the European Court of Justice (ECJ). "The Court's
expansive interpretations of Article 119 and the various directives have
required extensive national reforms of social security law and corporate
employment practices" (151). Since 1978, governments have been far
more reluctant to adopt new EC social policy directives, fearing that they
might have similar unintended consequences.
A similarly expansive ECJ ruling in the Barber case harmonizing occupational
pensions up would have cost private insurers over 75 billion sterling pounds,
and was narrowly averted by member states only by the extraordinary measure
of adding a new "Barber protocol" to the Maastricht Treaty. The new protocol,
however, barred only the retroactive application of Barber, and so the
prospective impact remains profound (152).
While from these two cases it is clear that if member states disagree
with an EC institution strongly enough, they can simply revise the treaty.
This requires, however, unanimous agreement, and so Treaty amendment is quite
difficult. A state that disagrees with a particular provision might still
unilaterally refuse to implement an EC law, yet this is similar to a "nuclear
option" in conflict: it is a very effective threat but substantially incredible
in that it can only rarely, if ever, be implemented.
William Bernhard and David Leblang, “Democratic Institutions and Exchange-rate
Commitments,” International Organization 53:1 (Winter 1999), 71-97.
The authors examine the exchange-rate arrangements
adopted by the industrial democracies since the end of Bretton Woods system,
focusing on the role of domestic political institutions (electoral and legislative
institutions) in explaining a government’s choice among different types
of exchange-rate system. They conclude that where the cost of electoral
defeat is high and electoral timing is exogenous, a floating exchange rate
is preferred; where the cost of electoral defeat is low and electoral timing
is endogenous, a fixed exchange rate is preferred. This is because under
a fixed exchange rate politicians lose the ability to manipulate monetary
policy for electoral or partisan reasons – although it is more effective
in stabilizing the external trading environment.
The existing literature on choice of exchange-rate
system are based on factors such as: 1) economic structure and sensitivity
of the economy to domestic/international macroeconomic shocks 2) presence
and role of an international hegemon 3) domestic political actors such as
specific industries or interest groups. In this article, the authors consider
effects of electoral decisiveness, opposition influence over policy, and
electoral timing. Trade dependence, vulnerability to shocks are treated
as international systemic variables, and partisanship and electoral cycle
are chosen as representing domestic political factors. There are three dependent
variables: fixing, floating, or participating in a multilateral currency
arrangement. The test results showed that the domestic political institutional
variables are both statistically significant and correctly signed. Politicians
in a majoritarian–low opposition influence system were much more likely to
adopt a floating exchange rate than politicians in a proportional–high opposition
influence system. Also, countries with exogenous electoral timing are more
likely to allow their exchange rates to float.
With the test results above, the authors argue against the explanations
based on policy capabilities and credible commitments – which imply that
politicians in majoritarian systems are more prone to fix exchange rates
than those in proportional representation systems. The authors also emphasize
interaction between the international economy and domestic politics, but rather
than focusing on international influence on domestic policy choice but from
the point stressing the role of politicians in responding to the demands
of the international economy. Politicians have interests and incentives independent
of economic and societal forces (their own political interests) and these
factors must be considered to explain policy choices more accurately, in
addition to consideration on economic conditions.
Lisa Martin, Democratic Commitments: Legislatures and International
Cooperation, Princeton: Princeton University Press, 2000. Chapters 2
Contrary to conventional wisdom, legislatures have deep influence on international
cooperation through the mechanism of international cooperation. Legislators
care about foreign policies as well as domestic policies, since the well
being of their constituents often depends as heavily on interaction with
other states as well as on purely domestic policies. Yet it is difficult
for legislators to exercise international influence of their own. Constitutionally
and functionally, executives are better placed to exercise such influence
than are legislators. Executives have responsibility for negotiating with
other states and have better capacity for acquiring information about the
rest of the world.
Martin draws on theories about institutions and legislatures to understand
when and how legislatures will influence foreign policy. Institutional perspectives
on legislatures draw our attention to the phenomenon of delegation. A fundamental
reason for delegation, and perhaps the most common, is complexity. Modern
politicians cannot deal with a vast range of issues without significant delegation.
Legislators also delegate to establish credible commitments and solve collective-action
problems (for instance, the committee system of the U.S. Congress provides
a commitment mechanism). They may also delegate to overcome commitment problems
that arise from issues of time inconsistency. (e.g. delegation of monetary
authority to an independent central bank that will not be tempted to manipulate
spending for political benefits). In foreign affairs the informational and
complexity logics of delegation are important. Legislators don’t have the
required expertise in a variety of issues. Delegation to those with expertise
while maintaining a veto over implementation of policies is an effective
mechanism for acquiring policy-relevant information while exercising influence
over the chosen policy. Finally, in foreign affairs effective foreign policy
requires that states be able to anticipate the character of international
strategic interaction. Governments need to act strategically, and states
need to “speak with one voice”.
Martin derives several hypotheses from the literature about legislatures:
1. The Delegation Hypotheses: Legislatures will move to institutionalize
their participation in international cooperative endeavors when there is
greater conflict of interest between the executive and the legislature. This
expectation follows directly from theories of delegation, which predict less
legislative willingness to delegate when the executive does not share extensive
common interests (e.g. during periods of divided government). The major alternative
to this hypothesis is the Abdication Hypothesis, which is derived from executive-dominance
theories. It states that legislatures that delegate authority to the executive
thereby abdicate their ability to influence outcomes.
2. The Influence Hypothesis: Executives are unable to manipulate the structures
of legislative participation to evade legislative influence on international
3. The Credibility Hypothesis: Institutionalized legislative participation
in international cooperation leads to greater credibility of international
commitments. Negotiators who see that their partners will have difficulty
putting an agreement into place due to domestic opposition will be reluctant
to commit themselves to the costly steps necessary for international cooperation.
But when the legislature is involved, negotiators are reassured that they
will not frustrate the implementation of the agreement. The study finds this
hypothesis to be true, and thus its conclusion is the opposite of traditional
studies that view legislative involvement as an obstacle to cooperation.
Rather, it enhances the credibility of states’ commitments, thus leading
to more stable and deeper patterns of international cooperation.
The Credibility Hypothesis is tested with regard to the implementation of
international agreements in the context of the EU, using implementation rates
a measure of credibility. The high implementation rates of Denmark are explained
by the highly activist participation of the Danish parliament, the Folketing,
in EU business. The Danish system requires extensive consultation with the
legislature throughout the negotiation process. The involvement of the Folketing
at the early stage assures that potential opposition to policies is anticipated
by the government. The government is accountable to parliamentary representatives,
so that negotiators feel that they will have to pay some penalty for committing
the state to an agreement that will not be implemented efficaciously. The
procedure is transparent, so that negotiating partners and those affected
by the laws have a good understanding of who has leverage in the policymaking
process. The author also finds high positive correlation between the strength
of member-states EU committees and a good implementation record. The evidence
thus shows that European integration is consistent with, and perhaps even
supported by, a well-organized parliamentary involvement in EU negotiation,
as expected according to the Credibility Hypothesis.