Explaining the Design of International Institutions

Question 1

Design of International Institutions:
Five Dependent Variables

Answer 1

1. Membership Rules
   -Exclusive vs. inclusive
   -Only state actors vs. non-state actors
   -Regional vs. universal
2. Scope of Issues
   -One issue vs. several issues
3. Centralization of Tasks
   -Information
   -Presence of centralized bodies
4. Rules for Controlling the Institution
   -Rules for electing key officials
   -Voting arrangements
5. Flexibility of Arrangements
   -Institutional rules that accommodate new circumstances
   -Adaptive: allows members to respond to shocks while preserving institution
   -Transformative: Built-in arrangements to transform the institution overtime

Question 2

Design of International Institutions:
Four Independant Variables

Answer 2

1. Distributional problems
   -The dating game
   -Multiple efficient equilibria
   -International agreements generate uneven distributional effects
2. Enforcement Problems
   -Strength of incentives to cheat on agreements
   -Arises when actors find non-cooperation more enticing than long-term cooperation
   -Functions as the shadow of the future
3. Number of Actors
   -Bilateral vs. plurilateral vs. multilateral
   -Number may grow over time
4. Uncertainty
   -Behavior: States unsure about other’s actions
   -State of the world: States’ knowledge about the consequences of action
   -Preferences: Governments unsure what others want

Question 3

Assumptions of Institutional Design

Answer 3

Rational Design –> maximizes state’s utility function

Long Shadow of the Future –> a “bad” design is costly

Transaction Costs are Large –> non-cooperation is costly

States are Risk-averse –> no room for experimentation

Question 4

Results: Restricted Membership

Answer 4

-Increases as the enforcement problem becomes more severe
-Member countries worried that other countries will not comply, thus selective in including other countries
-Increases as uncertainty about preferences increases
-Membership is costly, so states only join if they really want to

Question 5

Results: Scope

Answer 5

-Increases with greater heterogeneity between actors
-Increases with the severity of the enforcement problem
-Increases with the severity of the distribution problem
-Caused by issue linkage

Question 6

Results: Flexibiliy

Answer 6

-Increases with uncertainty about the state of the world
-Increases with the severity of the distribution problem

Question 7

Broader-Deeper Trade-Off

Answer 7

Gilligan
-A large number of member states may prevent the occurrence of deep cooperation
-More members –> more veto players
-More members –> more heterogeneous preferences

-Intuitive in theory, does not play out in practice (eg. WTO, EU)

-The trade-off occurs when members chose a single policy that applies to all
-If the assumption that all members have to have the same policy is relaxed, the trade-off disappears

-Different policies for different countries –> deeper cooperation with lots of member countries
-Also admission to organizations takes place over time as countries liberalize more
-So you start with fewer members and only add members when they are ready to commit to deep agreement

Question 8

Rational Design Summary

Answer 8

-Variation in the design of international institutions is a function of cooperation problems
-Distribution problems and uncertainty are independent variables
-Weak empirical evidence for the broader-deeper trade-off