International Law Rational Choice Theory
by
Anne van Aaken
  • LAST REVIEWED: 10 July 2015
  • LAST MODIFIED: 30 November 2015
  • DOI: 10.1093/obo/9780199796953-0051

Introduction

International law scholarship has predominantly been doctrinal in nature. Nevertheless, international law and rational choice assumptions have been closely connected for a long time. For the most part, realist thinkers in international relations are the ones who have used rational choice assumptions to explain states’ behavior (though [liberal] institutionalist thinkers have done so as well), but they have rarely entered into legal intricacies. Instead, “big theories” have been at the forefront of the discussion. Economics is the study of rational choice. The rational choice approach to international law allows for theoretical conjectures that can be tested empirically regarding two questions: What are the effects of international law (international law as explanans; this question includes its effectiveness)? Why do states legalize their relations (international law as explanandum)? The rational choice assumption has been a cornerstone of positive economics and economic analysis of law, which applies economic methods to analyze law. International law is a rather young subject of economic analysis of law, but it has gained prominence since 2000. Following the traditional international law assumptions in the aftermath of the Westphalian peace, the nation-state has mostly been analyzed as a unitary actor, or what has been described as a “black box” state, but in the discussion on international governance this has also changed recently. Analyzing international law through the rational choice perspective has become a joint enterprise by economists, international lawyers, and rational-choice political scientists, focusing on more precise questions of international law scholarship intended to inform doctrinal scholarship as well. Rational choice analysis may be used to diagnose substantive problems and frame better legal solutions, explain the structure or function of particular international legal rules or institutions, and reconceptualize or reframe particular institutions or international law generally, such as customary international law. It is well acknowledged that legal scholars alone cannot accomplish these tasks, and that social science approaches are needed to address them. By now, many international relations scholars, as well as law and economic scholars, start from a rationalist assumption but do not exclude other explanatory factors used by other theories. The scholarship is US-driven, and English is the main language in which research on the topic is published.

General Overviews

Realist accounts of international relations scholarship have implicitly, or even explicitly, used rational choice assumptions in order to explain and predict states’ behavior: states pursue power rationally. Classical realists (as well as neorealists) assume competition for security in the anarchical system of international relations; states play zero-sum games. Law is epiphenomenal to international relations. Goldsmith and Posner 2005 is the first book-length contribution in this tradition, but it also adds the economic analysis of law to study general international law as well as specific regimes in more detail (see also Goldsmith and Posner 2002. This highly controversial book has led to reactions by other law and economics scholars, political scientists, and international lawyers, such as Guzman 2008 and Trachtman 2008, which, in a more institutionalist tradition, assume international law to play a role in changing and structuring the behavior of states, making cooperation between states possible. Ever more international law and international relations scholars as well as economists are coauthoring to analyze international law. First formulations started around 1990 (see Abbott 1989, Dunhoff and Trachtman 1999, Slaughter 2001); for collected essays see, van Aaken, et al. 2008; Posner 2010; Eger, et al. 2014; an excellent volume for problems relating to general international law is Dunoff and Pollock 2013.

  • Abbott, Kenneth W. “Modern International Relations Theory: A Prospectus for International Lawyers.” Yale Journal of International Law 14 (1989): 335–411.

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    This early article on the use of rational choice in international law is still a good starting point to understand basic concepts and the application of economic tools to international law. Abbott takes a functional view on international law, as most economists would do.

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    • Dunoff, Jeffrey L., and Mark A. Pollack, eds. Interdisciplinary Perspectives on International Law and International Relations: The State of the Art. Cambridge, UK: Cambridge University Press, 2013.

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      The first part contains theories about international law from different international relations perspectives but, in the substantive part, most contributors take a rational choice approach to international law. The book covers a broad range of issues, from international law making to adjudication and compliance. It is ideal as a starting point to discover the rational choice approach in context.

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      • Dunoff, Jeffrey L., and Joel P. Trachtman. “Economic Analysis of International Law.” Yale Journal of International Law 24 (1999): 1–59.

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        Another early article explaining why international lawyers, if being prescriptive, should also start being explanatory, using social science. Authors analyze international law and explain rationalist tools that are largely borrowed from economics and, in several cases, from law and economics. They also outline the limits to rationalist analysis but sketch a research agenda for further research that is currently followed.

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        • Eger, Thomas, Stefan Oeter, and Stefan Voigt, eds. Economic Analysis of International Law. Tübingen, Germany: Siebeck/Mohr, 2014.

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          The contributors to this volume represent a largely European perspective. The topics covered treat classic issues of international law such as comity or custom as well as highly topical issues such as Internet privacy, private military contractors, the fight against piracy, and large-scale agricultural investments.

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          • Goldsmith, Jack L., and Eric A. Posner, eds. Special Issue: Rational Choice and International Law. Journal of Legal Studies 31.S1 (2002).

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            A special issue on rational choice and international law, the first one of its kind, and thus partially exploratory with more fundamental questions, and partially devoted to specific topics, such as corruption, trade, and environment, mirroring the fundamental discussion.

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            • Goldsmith, Jack L., and Eric A. Posner. The Limits of International Law. Oxford: Oxford University Press, 2005.

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              The first application of economic analysis to international law in book form. Applies simple game theory to general and specific questions of international law, such as sources and compliance. Proved highly controversial because the authors purport that international law is epiphenomenal to states’ behavior.

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              • Guzman, Andrew. How International Law Works: A Rational Choice Theory. Oxford: Oxford University Press, 2008.

                DOI: 10.1093/acprof:oso/9780195305562.001.0001Save Citation »Export Citation »E-mail Citation »

                A reaction to Goldsmith and Posner 2005, refining the game theoretical analysis and explaining why and under what circumstances international law can be relevant to states’ behavior. Guzman states that international law can be effective under certain circumstances, mainly using the reputational mechanisms to alter payoffs of states. He uses three Rs (reciprocity, retaliation, and reputation) to explain compliance with international law.

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                • Posner, Eric, ed. Economics of Public International Law. Cheltenham, UK: Edward Elgar, 2010.

                  DOI: 10.4337/9781785362088Save Citation »Export Citation »E-mail Citation »

                  The essays in this collection use interdisciplinary perspectives to investigate issues in international law, all employing rational choice. The collections gather some of the seminal articles written on the economic analysis of international law.

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                  • Slaughter, Anne-Marie. “International Law and International Relations: Millennial Lectures.” Recueil des Cours 285 (2001): 9–250.

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                    A very comprehensive discussion of the advantage of applying international relations theory to international law, and thus a forceful plea for the inclusion of social science in the analysis of international law of one of the most prominent international lawyers. All international relation theories are discussed, but the preference of the author lies in institutional liberalism, using a rational choice approach.

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                    • Trachtman, Joel P. The Economic Structure of International Law. Cambridge, MA: Harvard University Press, 2008.

                      DOI: 10.4159/9780674044432Save Citation »Export Citation »E-mail Citation »

                      Also a reaction to Goldsmith and Posner 2005, using a variety of economics tools to develop a systematic framework enabling students and scholars to apply economic analysis to the formation and application of international law, focusing on general international law. A highly recommended book for advanced students and scholars who want to explore the possibilities of economic tools for a social science analysis of international law.

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                      • van Aaken, Anne, Tom Ginsburg, and Christoph Engel, eds. Special Issue: Symposium: Public International Law and Economics. University of Illinois Law Review 1 (2008).

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                        Provides an overview on the discussion of the rational choice approach to international law by US law and economic scholars, European international lawyers, political scientists, and economists. It features more general discussion on the application of rational choice to international law, but also addresses specific issue areas of international law. A dialogue between European and US scholars of international law clarifies methodological differences and different attitudes toward international law.

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                        Textbooks

                        Most of the more recent research in economic analysis of international law has appeared in journals. The only available textbook for teaching is Posner and Sykes 2013. In addition, a book of collected essays (Posner 2010) is available. As introductory books, the works listed under General Overviews are the ones available at the moment. For classical economic analysis of law or institutional economics, textbooks are plentiful, of which only some can be mentioned here. They usually do apply economic methods to substantive and procedural law, primarily with reference to US law but not to international law (Cooter and Ulen 2007, Polinsky 2011). Nevertheless, these books provide tools that transpose to international law. The law and economics movement is broad and diverse and allows for quite diversified thinking, also normatively (Mercuro and Medema 2006).

                        • Cooter, Robert C., and Thomas Ulen. Law and Economics. 5th ed. Boston: Pearson/Addison-Wesley, 2007.

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                          A very good introduction to law and economics, including a discussion of the rational choice assumptions and efficiency. It treats property, contract, and tort law as well as legal process.

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                          • Mercuro, Nicolas, and Steven G. Medema. Economics and the Law: From Posner to Postmodernism and Beyond. 2d ed. Princeton, NJ: Princeton University Press, 2006.

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                            Provides an excellent introduction to the broad contours of law and economics. It can be especially recommended to readers interested in short but very informative overviews on different aspects of this discipline; it discusses the beginning in Chicago, as well as the Yale School of Law and Economics and institutional economics, and it puts these in the broader frame of theoretical approaches to law.

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                            • Polinsky, A. Mitchell. An Introduction to Law and Economics. 4th ed. New York: Wolters Kluwer Law & Business, 2011.

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                              A shorter introduction, not including the more basic discussions on rationality, but giving a formidable insight into the application of economic methods to law.

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                              • Posner, Eric A., and Alan O. Sykes. Economic Foundations of International Law. Cambridge, MA: Harvard University Press, 2013.

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                                An introduction to the economic analysis of international law, following the rather realist assumptions of earlier works of Eric Posner but covering many topics in international law.

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                                Reference Works

                                No special encompassing reference works on the rational choice approach to international law are available. There are, however, reference works that discuss the rational approach to law (law and economics) and its tools—such as the Encyclopedia of Law and Economics, which is available online (see Bouckaert and De Geest 2000)—as well as the rational choice approach to international law. There are also handbooks on international relations (Carlsnaes, et al. 2002; Reus-Smits, et al. 2008), which, inter alia, discuss the rational choice approach to international relations and the role of law therein.

                                • Bouckaert, Boudewijn, and Gerrit De Geest, eds. Encyclopedia of Law and Economics. Cheltenham, UK: Edward Elgar, 2000.

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                                  Allows users to search not only general discussions and developments in law and economics but also specific topics. Gathers the most prominent scholars in the field, and is highly recommended as a place to start research on any tools and on any field of law, or to get a quick overview. Only two entries deal with international law. Based on the five-volume print edition, free online access. A new edition of twelve volumes it partially out but not yet online for free. It comprises the following topics: criminal law, regulation, methodology of law, property law, intellectual property law, contract law, tort law, labor and employment law, antitrust law, corporate law, procedural law, and the production of legal rules.

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                                  • Carlsnaes, Walter, Thomas Risse, and Beth A. Simmons, eds. Handbook of International Relations. London and Thousand Oaks, CA: SAGE, 2002.

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                                    This handbook assembles the highest-quality articles on the important issues in international relations scholarship. It contains articles that clarify the theoretical debate on rational choice and other approaches to international relations (see Fearon and Wendt 2002, cited under Classical Rational Choice Assumptions). It also clarifies potentials of and limits to rational choice approaches (Duncan Snidal, “Rational Choice and International Relations” [pp. 73–94]). Furthermore, it contains articles on psychological approaches using behavioral economics, which are increasingly being used in economic analysis of law (see Gross Stein 2002, cited under Enriching Rational Choice).

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                                    • Reus-Smit, Christian, and Duncan Snidal, eds. The Oxford Handbook of International Relations. Oxford: Oxford University Press, 2008.

                                      DOI: 10.1093/oxfordhb/9780199219322.001.0001Save Citation »Export Citation »E-mail Citation »

                                      This is a more recent handbook on international relations, covering similar topics as Carlsnaes, et al. 2002 but taking up not only positive social science approaches, but also normative differences in the theories of international relations. It gathers work by the most prominent scholars in their field and conveys the dialogue between different schools in an excellent way.

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                                      Journals

                                      Journals publishing articles that deal with rational choice approach to international law are manifold; such articles can be found in political science journals, law and economics journals, and journals of international law.

                                      International Law

                                      The American student-edited journals of international law, especially the Yale Journal of International Law and the Harvard International Law Journal include articles that may even use mathematical formulae. The same holds true for the American Journal of International Law as well as the European Journal of International Law, arguably the most influential journals on international law. Most of the international law journals also now include articles that apply rational choice to international law. Their book reviews also discuss the works mentioned in the General Overview. Also, the Journal of International Economic Law includes rational choice analysis on international economic law.

                                      International Relations

                                      For political science, International Organization is the most prominent journal in which rational choice approaches to international law can be found. The Review of International Organizations has published rational choice approaches, which are sometimes very detailed in law, as well as empirical studies.

                                      • International Organization. 1947–.

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                                        International Organization is a leading peer-reviewed journal of the highest quality. It includes articles on the whole range of subjects in international relations, including theoretical approaches. It also contains some of the most interesting articles in relation to the rational choice approach to international law, mirroring institutionalist thinking in international relations.

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                                        • Review of International Organizations. 2006–.

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                                          A leading journal with a mixed editorial board (political scientists and economists), focusing on the analysis (theoretical and empirical) of international organizations, as well as nonstate actors in international governance. The best place to look for high-quality political economy analysis of international institutions.

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                                          Law and Economics

                                          More and more law and economics journals also include articles on international law. The most important and best ones are the American Law and Economics Review; European Journal of Law and Economics; Review of Law & Economics; International Review of Law and Economics; Journal of Law, Economics, & Organization; Journal of Law and Economics; Journal of Legal Studies; and Journal of Empirical Legal Studies. The American journals in general contain better-quality articles than the European ones, although a growing number of law and economics journals have a mixed editorial board and publish innovative new research as well.

                                          • American Law and Economics Review. 1999–.

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                                            This journal is the official journal of the American Law and Economics Association and has been published semiannually since 1999. It is refereed and contains high-quality articles in the field of law and economics. Although the focus has not been on international law yet, many of the articles provide tools for a rational choice approach to law, transferable to international law.

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                                            • European Journal of Law and Economics. 1994–.

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                                              As its name signals, the journal has a focus on European Union (EU) law and economics and legal systems within Europe. Its editorial board is mixed European and American, but it has a distinct European flavor to it, although there is usually one European and one American referee. The focus is on empirical work, mainly concerning EU law or legal systems within Europe.

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                                              • International Review of Law and Economics. 1981–.

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                                                A cooperative effort between first-generation European law and economics scholars and American scholars. It publishes articles on a variety of topics.

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                                                • Journal of Empirical Legal Studies. 2004–.

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                                                  Published on behalf of the Society for Empirical Legal Studies and Cornell Law School, this journal fills a gap in legal scholarship, addressing the empirical consequences of law—“a gap that has often left scholars, lawyers, and policy makers without basic knowledge of legal systems.” It is the highest-ranked journal in its field and a must for legal scholars who are interested in empirical knowledge and evidence-based law.

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                                                  • Journal of Law and Economics.

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                                                    Publishes high-quality research in the fields of regulation and private law and includes analysis of current public policy issues. Published by the University of Chicago Press for the University of Chicago Law School.

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                                                    • Journal of Law, Economics, & Organization. 1985–.

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                                                      One of the most highly ranked journals in law and economics. Publishes articles on a variety of topics, including empirical research. It is explicitly not confined to classical economic methods but includes political science, psychology, and sociology in order to analyze institutions and organizations. As such, it is at the forefront of research. Currently, its editor-in-chief is a political scientist concerned with positive political theory (using rational choice).

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                                                      • Journal of Legal Studies. 1971–.

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                                                        This journal, founded in 1971, is published by the University of Chicago Press for the University of Chicago Law School and is a journal of interdisciplinary academic research into law and legal institutions. It emphasizes social science approaches, especially those of economics, political science, and psychology, but it also publishes the work of those in other disciplines interested in legal theory, such as historians and philosophers. It is also one of the highest-ranked journals for law and economics.

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                                                        • Review of Law & Economics. 2004–.

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                                                          Publishes journals with fast, high-quality peer review; an undertaking initiated by academics from the University of California, Berkeley. It is a fruitful mixing of younger American and European scholars with first- and second-generation law and economics scholars.

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                                                          Rational Choice Tools for Analysis of International Law

                                                          Positive economic analysis is characterized by its use of the rational choice model of actors’ behavior. When applied to law, including international law, rational choice analysis mainly comes under the headings of “law and economics,” “institutional economics,” “political economy,” or “economic analysis of law.” International law has been a rather late area of analysis, but research is currently accelerating. International relations scholarship and economic scholarship merge in their efforts to analyze international law in more intricate detail, using rational choice models and economic methodology. The traditional, much-debated, normative criterion of efficiency is not that much of a problem in the analysis of international law; instead, the effectiveness and compliance as well as the rational design of international treaties and institutions are at the forefront of the discussion. Rational choice offers a promising foundation, a coherent set of common assumptions, and various analytical tools on which positive theorizing regarding the creation and influence of international law can be based. Many tools of economic analysis are used in the endeavor: game theory, contract theory, price theory, and collective action theory (such as public choice or political economy analysis). Furthermore, although states are usually assumed to act rationally, developments in the behavioral model, including psychology, have recently also reached the analysis of international law.

                                                          Classical Rational Choice Assumptions

                                                          The assumptions of rational choice theory are very simple, but these are useful simplifications in order to build testable conjectures. Its underlying assumption is methodological individualism. An actor (be it an individual, a state, an enterprise, a nongovernmental organization, or an international organization) is assumed to act purposefully in order to achieve its set of goals (preferences). These are not confined to monetary goals but can represent (for states) security, (economic) power, providing public goods, or not harming the environment. These sets of goals are also subject to restraints, which can be, as is traditional in economics, budget constraints, but also all other types of constraints, like law and informal norms. In short, actors act rationally (i.e., intentionally) in view of their own preferences, subject to the constraints. A change in behavior is attributed to a change in restraints (e.g., a budget constraint due to a change in prices), not a change in preferences (preferences are assumed to be fixed). This is the main difference to constructivist theories of international law (Fearon and Wendt 2002). This methodological construction allows for incentive-based studies, forming hypotheses about the consequences of law that can be empirically tested. The paradigm competes with sociological approaches to law (see van Aaken 2003). The rational choice approach to law assumes that law acts as a constraint, making certain behavior more or less costly. It also assumes that law does not only constrain behavior, but also enables and facilitates behavior that makes actors better off—marriage laws, for example, enable marriage, contract law facilitates market exchange by reducing transaction costs, and international law facilitates cooperation between states.

                                                          • Fearon, James, and Alexander Wendt. “Rationalism v. Constructivism: A Skeptical View.” In Handbook of International Relations. Edited by Walter Carlsnaes, Thomas Risse, and Beth A. Simmons, 52–72. London: SAGE, 2002.

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                                                            A short and balanced overview of the discussions between rational choice and constructivist scholars that clarifies the limits and potential of both, depending on the research question.

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                                                            • van Aaken, Anne. “Rational Choice” in der Rechtswissenschaft: Zum Stellenwert der ökonomischen Theorie im Recht. Baden-Baden, Germany: Nomos, 2003.

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                                                              An in-depth analysis of rational choice and the efficiency concept of economics as applied to law, showing the potential of rational choice analysis (and its developments), in comparison with other social science approaches and discussing it in the context of lawmaking and law application.

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                                                              Rational Choice Tools

                                                              The unifying assumption of positive economics is clearly the rational choice assumption, for it is the discipline that has developed this assumption and the respective tools the furthest. Other disciplines have contributed and also use rational choice. These include philosophy, political science, or evolutionary biology, but also psychology. Nevertheless, positive economics is the discipline that is most deeply wedded to rational choice analysis. The following tools are not exhaustive, but these are the ones predominantly used by rationalist international lawyers.

                                                              Game Theory

                                                              Game theory is a tool to model strategic behavior between actors in which an actor’s payoffs from a given action (choice) depends on the actions (choices) of others. It has been used for a long time in economics (von Neumann and Morgenstern 1944) and other disciplines, such as computer science and biology, as well as in international relations scholarship, especially for modeling security issues (Dixit and Nalebuff 2010, Schelling 1960). Many different games have been developed (e.g., cooperative and noncooperative games, symmetric and asymmetric games, zero-sum and non-zero-sum games, simultaneous and sequential games, and games with perfect and with imperfect information), depending on what the underlying assumptions on the situation and the actors are. Games applied in international law are mostly pure coordination games (as in civil aviation), the prisoners’ dilemma game (as in security issues), the stag hunt game, and the battle of the sexes game. All these games are applied in the rational choice analysis of international law (see the Textbooks section). Baird, et al. 1994 provides a more general application of game theory to law, while Morrow 1994 applies it to international relations.

                                                              • Baird, Douglas G., Robert Gertner, and Randal C. Picker. Game Theory and the Law. Cambridge, MA: Harvard University Press, 1994.

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                                                                Gives a more easily accessible overview of how game theory can help to understand and design laws and contracts. This is the standard book on the application of game theory to law, but it does not have a special focus on international law.

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                                                                • Dixit, Avinash, and Barry Nalebuff. The Art of Strategy: A Game Theorist’s Guide to Success in Business and Life. New York: W. W. Norton, 2010.

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                                                                  An easy-to-read game theory introduction for noneconomists written by the most prominent scholars of the field. A funny layman’s read.

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                                                                  • Morrow, James D. Game Theory for Political Scientists. Princeton, NJ: Princeton University Press, 1994.

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                                                                    This book presents the most prominent applications of game theory in international relations in a very accessible way.

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                                                                    • Neumann, John von, and Oscar Morgenstern. Theory of Games and Economic Behavior. 2d ed. Princeton, NJ: Princeton University Press, 1944.

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                                                                      This is the first formal elaboration of game theory, which gained its authors prominence. One should use it only if one is comfortable with mathematical formulae.

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                                                                      • Schelling, Thomas C. The Strategy of Conflict. Cambridge, MA: Harvard University Press, 1960.

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                                                                        This book is the first of its kind to model security issues in the Cold War in game theoretic terms. It is still a wonderful read, displaying no formulae and only a few game matrices. It was written for policy makers and is very useful for international law as well, because zero-sum games do not only occur in security issues.

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                                                                        Contract Theory

                                                                        Because treaties are the most important source of international law, economic contract theory lends itself easily as a tool for analysis of treaty making, although it has been applied mainly to individual contracting (be it in the market place or in organizations in order to model principal agent relationships). Contract theory analyzes, generally in the presence of asymmetric information (which may lead to moral hazard and adverse selection), why and how actors construct contractual arrangements (Bolton and Dewatripont, 2005). Traditionally, the legal analysis of contracts takes an ex post perspective, that is, it focuses on rights and obligations after there has been an alleged breach, as well as on the recovery of losses for the injured party. Contract theory shifts the focus to the ex ante decision and asks why and under what circumstances parties enter into a contract in the first place, thus acknowledging the consensual approach as well as the participation constraint of parties. Enforceable contracts represent a mechanism for achieving compliance with cooperative goals that are supposed to benefit the collective interest (maximizing the joint surplus) of parties whose particular interests may diverge at a given time. Contract theory is primarily an analytical approach to explain why parties enter into contracts in the first place, and why they write the contracts they do, in light of what courts do. Furthermore, it helps to answer questions of optimal contracting. It is based on information economics and the distribution of risks in a contract. Because contracts or treaties are incomplete, contract theory deals with the question of how to deal with unforeseen circumstances. Scott and Stephan 2006 explicitly uses contract theory to explain enforcement in international law.

                                                                        • Bolton, Patrick, and Mathias Dewatripont. Contract Theory. Cambridge, MA: MIT, 2005.

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                                                                          This book is the first comprehensive treatment of contract theory, written by two of the most prominent scholars of contract theory. It covers all the major topics in contract theory that are taught in most graduate courses, and it is suitable for advanced students. One should feel comfortable with mathematics, but it is also worthwhile reading and understandable without a strong knowledge of mathematics.

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                                                                          • Scott, Robert E., and Paul B. Stephan. The Limits of Leviathan: Contract Theory and the Enforcement of International Law. Cambridge, UK: Cambridge University Press, 2006.

                                                                            DOI: 10.1017/CBO9780511511370Save Citation »Export Citation »E-mail Citation »

                                                                            An accessible book on the application of contract theory to international law, with a special view on enforcement of international law. It develops a model of optimal enforcement and applies it to several issue areas, such as the International Criminal Court, the World Trade Organization, the International Court of Justice, and domestic judicial enforcement of the Geneva Conventions.

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                                                                            Public Choice and Political Economy

                                                                            Public choice theory and political economy (though this term is also used for Marxist economics) now most commonly refers to applying rational choice in economics, law, or political science in order to explain how nonmarket or political institutions work, and to explain political processes and their outcomes. Much of the research centers on determinants of electoral outcomes, independent nonmajoritarian institutions, constitutions and bureaucracy, rent seeking, and corruption, thus being of utmost importance also for law and development research (Mueller 2003). This approach is also used for analysis of international law and international organizations (Frey 1997, Vaubel 2006, Vaubel and Willet 1991). Cohen 2014 gives an excellent introduction to international political economy.

                                                                            • Cohen, Benjamin J. Advanced Introduction to International Political Economy. Cheltenham, UK: Edward Elgar, 2014.

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                                                                              A short introduction and overview of different approaches of political economy in international relations. Not confined to the US approach and thus showing the variety of approaches.

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                                                                              • Frey, Bruno S. “The Public Choice of International Organizations.” In Perspectives on Public Choice: A Handbook. Edited by Dennis Mueller, 106–123. Cambridge, UK: Cambridge University Press, 1997.

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                                                                                Frey, one of the most important European institutional economists, gives a short overview on the public choice perspective on international organizations. A good starting point to learn about the application of public choice to international organizations.

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                                                                                • Mueller, Denis D. C. Public Choice III. Cambridge, UK: Cambridge University Press, 2003.

                                                                                  DOI: 10.1017/CBO9780511813771Save Citation »Export Citation »E-mail Citation »

                                                                                  A good introduction to public choice theory, one that allows the reader to easily search for specific topics. It is not encompassing in the treatment of the issues, however.

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                                                                                  • Vaubel, Roland. “Principal-Agent Problems in International Organizations.” Review of International Organizations 1.2 (2006): 125–138.

                                                                                    DOI: 10.1007/s11558-006-8340-zSave Citation »Export Citation »E-mail Citation »

                                                                                    Deals with the principal-agent problem in international organizations, applying classical economic theory to international organizations.

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                                                                                    • Vaubel, Roland, and Thomas D. Willet, eds. The Political Economy of International Organizations: A Public Choice Approach. Boulder, CO: Westview, 1991.

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                                                                                      A collection focusing on the economic approach to analyzing international organizations, explaining the public choice approach as well as applying it to different international organizations, mainly those dealing with economic issues, such as the International Monetary Fund and the Organization for Economic Cooperation and Development.

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                                                                                      Empirical Methods

                                                                                      Empirical research has become ever more important in economic analysis, and empirical research on law is now much appreciated by the best journals. Economics has developed, just as other social sciences, better tools to conduct rigorous empirical analysis, including in law (Lawless, et al. 2010). A growing amount of empirical and experimental analysis is being conducted on the effects of international law and why states legalize their relations (Chilton and Tingley 2013), and it is thus useful to become familiar with these methods.

                                                                                      • Chilton, Adam S., and Dustin H. Tingley. “Why the Study of International Law Needs Experiments.” Columbia Journal of Transnational Law 52 (2013): 173–238.

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                                                                                        A call for experiments and an overview of experiments hitherto conducted in international law.

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                                                                                        • Lawless, Robert M., and Jennifer K. Robbennolt, and Thomas S. Ulen. Empirical Methods in Law. New York: Aspen, 2010.

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                                                                                          Although there are many textbooks on empirical methods, this new textbook was developed especially for teaching law students, and thus gives a good introduction for law students and those not familiar with empirical studies.

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                                                                                          Enriching Rational Choice

                                                                                          The classic assumption in international relations (and implicitly in international law scholarship) has been that states act rationally, yet most rational choice authors are well aware of the limits of rational choice analysis (Keohane 2002). Thus, although rational choice is used as a starting point, it has become enriched by (cognitive) psychological theories and experiments, a joint undertaking of psychologists and economists (Camerer and Loewenstein 2004). International relations scholarship has taken this development up by developing a so-called psychological approach (Gross Stein 2002). This draws heavily on behavioral economics, which is increasingly applied in law and economics (Engel, et al. 2007; Sunstein 2000). Abbott 2008 and van Aaken 2014 describe how to enrich rational choice in international relations and law, taking into account nonstate actors in international law analysis.

                                                                                          • Abbott, Kenneth. “Enriching Rational Choice Institutionalism for the Study of International Law.” University of Illinois Law Review 1 (2008): 5–46.

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                                                                                            Enriches the rational choice model in international law with constructivist theory. Drawing on liberal institutionalist theory and including nonstate actors, Abbot develops a useful framework for understanding international governance.

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                                                                                            • Camerer, Colin, and George Loewenstein. “Behavioral Economics: Past, Present, Future.” In Advances in Behavioral Economics. Edited by Colin Camerer, George Loewenstein, and Matthew Rabin, 3–54. Princeton, NJ: Princeton University Press, 2004.

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                                                                                              An excellent overview of the development of behavioral economics. The whole book may be used as an introductory text about the application of rational choice theory to behavioral economics.

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                                                                                              • Engel, Christoph Markus Englerth, Jörn Lüdemann, and Indra Spiecker Döhmann, eds. Recht und Verhalten: Beiträge zu Behavioral Law and Economics. Tübingen, Germany: Siebeck Mohr, 2007.

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                                                                                                A collection of articles from European scholars, extending the research, mostly in German. A good search for specific problems but not applying it to international law.

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                                                                                                • Gross Stein, Janice. “Psychological Explanations of International Conflict.” In Handbook of International Relations. Edited by Walter Carlsnaes, Thomas Risse, and Beth A. Simmons, 292–308. London: SAGE, 2002.

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                                                                                                  An excellent introduction into the application of psychological theories, starting from a rational choice basis, to international relations and law. It does not, however, clearly reference the behavioral law and economic sources, although the research draws on it.

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                                                                                                  • Keohane, Robert O. “Rational Choice Theory and International Law: Insights and Limitations.” Journal of Legal Studies 31.S1 (2002): 307–319.

                                                                                                    DOI: 10.1086/340089Save Citation »Export Citation »E-mail Citation »

                                                                                                    A careful review of the limits of a rational choice analysis in international law, while outlining its potential as well.

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                                                                                                    • Sunstein, Cass R., ed. Behavioral Law and Economics. Cambridge, UK: Cambridge University Press, 2000.

                                                                                                      DOI: 10.1017/CBO9781139175197Save Citation »Export Citation »E-mail Citation »

                                                                                                      Examines the most important issues concerning the application of behavioral economics to law. Discusses the approach generally and also contains applications to certain issue areas of law (although not international law). Nevertheless, a great deal of discussion has been going on since the publication of this volume, and there are many law journal articles on the topic in US journals as well as some discussion in Europe.

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                                                                                                      • van Aaken, Anne. “Behavioral International Law and Economics.” Harvard International Law Journal 55 (2014): 421–481.

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                                                                                                        While clarifying some basic misunderstandings in the application of rational choice theory in law, the author sketches a frame on how to use behavioral law and economics in international law analysis, discussing methodological caveats and applications.

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                                                                                                        Sources of International Law

                                                                                                        The classical sources of international law, especially treaties and custom, have of late been the subject of extensive analysis of rational choice scholars. Whereas the literature has examined the question of why states enter into treaties, why they write them the way they do, and why they comply with them, the discourse on customary international law has also been focused on contributing to the explanation of the very concept of treaties, which is still under discussion by traditional legal scholarship. The questions that arise in this section will be reconsidered in more detail in Rational Design of International Institutions and Compliance with and Effectiveness of International Law. Nevertheless, it should be clear that from a rationalist and explanatory perspective, the difference between treaties and custom is not clear-cut, but rather a difference in degree of behavioral effects.

                                                                                                        Treaties

                                                                                                        Treaties are arguably the most important source of international law. Whereas international law scholarship has traditionally assumed that states comply with international law, relying on international dispute resolution mechanisms, rationalist scholars have asked the above-mentioned questions. More realist scholars have declared law epiphenomenal, and early law and economic scholars have taken this approach (see Goldsmith and Posner 2005). Nevertheless, more enriched institutionalist analyses have been presented on why and how treaties come about (treaties as explanandum), on how they are designed, and on the question of compliance with international treaties (treaties as explanans), as in Guzman 2008, Trachtman 2008, or Setear 1996.

                                                                                                        • Goldsmith, Jack L., and Eric A. Posner. The Limits of International Law. Oxford: Oxford University Press, 2005.

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                                                                                                          The authors use basic game-theoretical concepts to explain international behavioral regularities as a function of national self-interest, deeming international law epiphenomenal. They assume four empirically identifiable basic behavioral patterns to explain state behavior: coincidence of interest, coordination, cooperation, and coercion by other states. Especially for multilateral treaties, they are skeptical on their effectiveness, hypothesizing instead that institutionalized communication by states is a primary function of many treaties.

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                                                                                                          • Guzman, Andrew. How International Law Works: A Rational Choice Theory. Oxford: Oxford University Press, 2008.

                                                                                                            DOI: 10.1093/acprof:oso/9780195305562.001.0001Save Citation »Export Citation »E-mail Citation »

                                                                                                            The Guzman book is somehow an institutionalist response to Goldsmith and Posner 2005. Especially for treaties, reputation plays a larger role than custom, because noncompliance can be monitored much better.

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                                                                                                            • Setear, John K. “An Iterative Perspective on Treaties: A Synthesis of International Relations Theory and International Law.” Harvard International Law Journal 37 (1996): 139–230.

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                                                                                                              Discussing the traditional legal scholars’ view on treaties, namely consent- and legitimacy-oriented perspectives on the law of treaties, Setear offers an additional explanation and justification for the law of treaties: the iterative perspective, which holds that the law of treaties, as well as the provisions of particular treaties, should encourage repeated interactions among nations and the adoption of certain strategies tending to lead to international cooperation.

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                                                                                                              • Trachtman, Joel P. The Economic Structure of International Law. Cambridge, MA: Harvard University Press, 2008.

                                                                                                                DOI: 10.4159/9780674044432Save Citation »Export Citation »E-mail Citation »

                                                                                                                This book explains the structure of international law, taking an institutionalist perspective and using the different tools of economics, not simply game theory, to explain compliance.

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                                                                                                                Custom

                                                                                                                The legal (theoretical) debate on customary international law—that is, the general and consistent practices of states that they follow from a sense of legal obligation (opinio iuris sive necessitatis)—is extraordinarily complex and continues to attract much reflection and discussion. The rationalist debate has tried to offer new perspectives on the old debate. Part of the rationalist literature has been even more skeptical on the behavioral effect of custom than on treaties (Goldsmith and Posner 1999). Nevertheless, other scholars have offered refined analysis, contributing to the legal debate as well (Chinen 2001, Fon and Parisi 2009, Norman and Trachman 2005, Swaine 2002) and now experiments are conducted as well (Engel 2011).

                                                                                                                • Chinen, Mark A. “Game Theory and Customary International Law: A Response to Professors Goldsmith and Posner.” Michigan Journal of International Law 23 (2001): 143–189.

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                                                                                                                  A critical reaction to Goldsmith and Posner 1999, Chinen purports that, in theory, there are enough stable forms of “true” cooperation that could serve as the basis for general and consistent practices. Although the concept of opinio juris continues to pose difficulties, he believes that it is too early in game theory’s development to conclude that it does not exist.

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                                                                                                                  • Engel, Christoph. “The Emergence of a New Rule of Customary Law: An Experimental Contribution.” Review of Law and Economics 7 (2011): 767–789.

                                                                                                                    DOI: 10.2202/1555-5879.1549Save Citation »Export Citation »E-mail Citation »

                                                                                                                    The author conducted an experiment closely mimicking the development of international custom, thereby contributing to understanding how custom develops.

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                                                                                                                    • Fon, Vincy, and Francesco Parisi. “Stability and Change in International Customary Law.” Supreme Court Economic Review 17 (2009): 279–300.

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                                                                                                                      The authors deal with the problem of persistent objectors by modeling the effects of the persistent objector and subsequent objector doctrines in the formation and change of custom when heterogeneous states are involved.

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                                                                                                                      • Goldsmith, Jack L., and Eric A. Posner. “A Theory of Customary International Law.” University of Chicago Law Review 66 (1999): 1113–1177.

                                                                                                                        DOI: 10.2307/1600364Save Citation »Export Citation »E-mail Citation »

                                                                                                                        A first development of the authors’ skeptical view on international law generally and custom specifically. They model custom as a behavioral regularity that emerges when states pursue their interests on the international plane.

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                                                                                                                        • Norman, George, and Joel P. Trachtman. “The Customary International Law Game.” American Journal of International Law 99.3 (2005): 541–580.

                                                                                                                          DOI: 10.2307/1602291Save Citation »Export Citation »E-mail Citation »

                                                                                                                          These authors reject the claim that custom is behaviorally epiphenomenal and doctrinally incoherent, and they offer a much more refined game-theoretical approach to custom, rejecting the argument that the multilateral prisoner’s dilemma is unlikely to allow custom to affect state behavior. A must read for institutionalist legal scholars. Available online from bepress.

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                                                                                                                          • Swaine, Edward T. Rational Custom. Duke Law Journal 52 (2002): 559–627.

                                                                                                                            DOI: 10.2307/1373163Save Citation »Export Citation »E-mail Citation »

                                                                                                                            This article attempts to explain how the rational choice critique and traditional doctrine may be reconciled. In the author’s view, rational choice theory can provide a useful and insightful tool for analyzing the relevance of law to state practices.

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                                                                                                                            Nonclassical Sources

                                                                                                                            Once one starts to look at the behavioral consequences of international law that are extending the doctrinal view, sources of international “law” come to the fore that are not listed in Article 38 of the Statute of the International Court of Justice. International governance is ever more influenced by soft law sources, and thus their behavioral effects have also been an object of study. Guzman 2002 develops a theory based on compliance with international law, assuming that nonclassical sources may also change states’ behavior due to reputational effects. From a social science perspective, soft and hard law can be defined on a continuum (Abbott and Snidal 2000); this categorization allows one to look beyond the classical sources in order to understand state behavior. Furthermore, soft law forms are used in international governance (Zaring 2005). Some of this has been captured by scholars studying global administrative law, although most of the scholarship remains without explicit rationalist assumptions (Krisch and Kingsbury 2006).

                                                                                                                            • Abbott, Kenneth W., and Duncan Snidal. “Hard and Soft Law in International Governance.” International Organization 54.3 (2000): 421–456.

                                                                                                                              DOI: 10.1162/002081800551280Save Citation »Export Citation »E-mail Citation »

                                                                                                                              By defining “hard” and “soft” law not according to the classical sources of international law but by looking deeper, international law is found to be “soft” in distinctive ways. The authors’ definition centers on three dimensions: obligation, precision, and delegation. Hard law refers to legally binding obligations that are precise and that delegate authority for interpretation and implementation. Soft law describes legal arrangements that are weakened along one or more of the three dimensions.

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                                                                                                                              • Guzman, Andrew T. “A Compliance-Based Theory of International Law.” California Law Review 90 (2002): 1823–1887.

                                                                                                                                DOI: 10.2307/3481436Save Citation »Export Citation »E-mail Citation »

                                                                                                                                Develops a reputational theory of international law, based on compliance, assuming that “law” is any norm, including soft law, that can materially alter state incentives. Includes a plea not to stop short with the classical sources of international law if one wants to understand how states behave. This work was the foundation for the author’s later book (Guzman 2008, cited under General Overviews).

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                                                                                                                                • Krisch, Nico, and Benedict Kingsbury. Introduction: Global Governance and Global Administrative Law in the International Legal Order. In Special Issue: Symposium on Global Governance and Global Administrative Law in the International Legal Order. Edited by Nico Krisch and Benedict Kingsbury. European Journal of International Law 17.1 (2006): 1–13.

                                                                                                                                  DOI: 10.1093/ejil/chi170Save Citation »Export Citation »E-mail Citation »

                                                                                                                                  Gives a formidable overview on the research agenda and research tools used in global administrative law by the scholars who have initiated this ever more prominent research agenda. Nevertheless, it also conveys that it is rather a normative than a positive undertaking, so that it is a challenge for rationalist scholars to pursue the problems posed with rationalist tools.

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                                                                                                                                  • Zaring, David. “Informal Procedure, Hard and Soft, in International Administration.” Chicago Journal of International Law 5.2 (2005): 547–603.

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                                                                                                                                    This paper deals with informal international regulatory cooperation, alleging that it is changing into recognizable forms of international administration. Zaring surveys some of those forms and focuses on financial market regulation, one of the most prominent examples of international soft law.

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                                                                                                                                    Compliance with and Effectiveness of International Law

                                                                                                                                    The great challenge in international law is to understand why states comply with international law (note, though, that compliance is different from effectiveness: the latter asks about causality between law and states behavior, whereas the former just descriptively states that states’ behavior is in conformity with the law, for whatever reason). Because there is no central enforcement mechanism, as in national legal orders, the puzzle has always been why and under what circumstances states change their behavior because of international law. From a rationalist, game-theoretical perspective, there are occasions where effectiveness is difficult to explain (e.g., in one-shot prisoners’ dilemma games). In international law, in contrast to national law, there is a second-order enforcement problem: sanctioning is costly to states, and they would prefer to free ride on the enforcement efforts of others. Put differently: enforcement is in many circumstances a public good (Goldsmith and Posner 2005). Nevertheless, more differentiated explanations for not-too-bad compliance with international law have been offered (Guzman 2002). The concept of reputation has in turn also been critically discussed (Downs and Jones 2002). Setear 1997 offers a rationalist perspective on the responses to breaches of international law, whereas Guzman 2002 relies more on the reputational effect of states when playing repeated games (as they do, because states usually do not die). Frischmann and Hartigan 2011 delve into the details of treaty design in order to explain compliance; Helfer looks at the choices states have regarding entering a treaty, having reservations, and exiting a treaty (Helfer 2005 and Helfer 2006).

                                                                                                                                    • Downs, George W., and Michael A. Jones. “Reputation, Compliance, and International Law.” Journal of Legal Studies 31.1 (2002): 95–114.

                                                                                                                                      DOI: 10.1086/340405Save Citation »Export Citation »E-mail Citation »

                                                                                                                                      This essay argues that there are a number of empirical and theoretical reasons for believing that the actual effects of reputation are weaker and more complicated than the standard view of reputation suggests. The authors conclude that states maintain multiple reputations.

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                                                                                                                                      • Frischmann, Brett M., and James C. Hartigan. “Compliance Institutions in Treaties.” Review of Law & Economics 7 (2011): 89–120.

                                                                                                                                        DOI: 10.2202/1555-5879.1474Save Citation »Export Citation »E-mail Citation »

                                                                                                                                        The authors develop a formal (game theoretic) model to better understand how the design and utility of particular compliance institutions, particularly escape clauses and dispute settlement mechanisms, depend upon the degree and nature of uncertainty regarding the future. Drawing on contract theory insights, they model a repeated game with changing external circumstances.

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                                                                                                                                        • Goldsmith, Jack L., and Eric A. Posner. The Limits of International Law. Oxford: Oxford University Press, 2005.

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                                                                                                                                          Deems international law to be epiphenomenal, not attributing behavioral force (i.e., effectiveness), to international law, but explaining compliance with other, nonlegal factors (such as coercion by powerful states) or interests.

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                                                                                                                                          • Guzman, Andrew T. “A Compliance-Based Theory of International Law.” California Law Review 90 (2002): 1823–1887.

                                                                                                                                            DOI: 10.2307/3481436Save Citation »Export Citation »E-mail Citation »

                                                                                                                                            A reputational model of compliance, in which Guzman assumes repeated games between states. Guzman gives more prominence to the reputation of states and thus alters the payoffs in the games, even in prisoners’ dilemma games in which compliance is unlikely and in which credible commitment of states is more difficult. By the same stance, he can better explain compliance with customary international law.

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                                                                                                                                            • Helfer, Laurence R. “Exiting Treaties.” Virginia Law Review 91.7 (2005): 1579–1648.

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                                                                                                                                              This article by an international lawyer with rational choice tendencies explores the decisions states make when entering or exiting treaties.

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                                                                                                                                              • Helfer, Laurence R. “Not Fully Committed? Reservations, Risk and Treaty Design.” Yale Journal of International Law 31 (2006): 367–382.

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                                                                                                                                                Considers the function of reservations in international treaties.

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                                                                                                                                                • Pauwelyn, Joost. Optimal Protection of International Law: Navigating between European Absolutism and American Voluntarism. Cambridge, UK: Cambridge University Press, 2008.

                                                                                                                                                  DOI: 10.1017/CBO9780511494291Save Citation »Export Citation »E-mail Citation »

                                                                                                                                                  Pauwelyn applies a seminal 1972 article of the law and economic literature (Guido Calabresi and A. Douglas Melamed, “Property Rules, Liability Rules, and Inalienability: One View of the Cathedral,” Harvard Law Review 85: 1089–1128) in explaining the different attitudes of US and European scholars to international law and its compliance.

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                                                                                                                                                  • Setear, John K. “Responses to Breach of a Treaty and Rationalist International Relations Theory: The Rules of Release and Remediation in the Law of Treaties and the Law of State Responsibility.” Virginia Law Review 83.1 (1997): 1–126.

                                                                                                                                                    DOI: 10.2307/1073740Save Citation »Export Citation »E-mail Citation »

                                                                                                                                                    An extensive article by a rationalist international relations scholar dealing with responses to breaches. He distinguishes sanctions of all kinds (military, political, and economic, including the rules under the draft for state responsibility), as well as “rules of release,” or the suspension of the victim’s own obligations. He also poses fundamental questions on the rationalist approach to international law.

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                                                                                                                                                    International Dispute Settlement

                                                                                                                                                    Courts and tribunals have been at the forefront of the discussion on international dispute settlement, whereas alternative dispute resolution mechanisms and their use still await an extensive rationalist explanation. Although some scholars have been skeptical (Posner and Yoo 2005, Stephan 2002), others have looked at the positive effects of international courts and tribunals (Alter 2003, Ginsburg and McAdams 2004, Guzman 2008, Helfer and Slaughter 2005).

                                                                                                                                                    • Alter, Karen J. “Do International Courts Enhance Compliance with International Law?” Review of Asian and Pacific Studies 25 (2003): 51–78.

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                                                                                                                                                      Reviews a broad variety of American literature on international law and state behavior to gain insights about the potential relationship between international courts and compliance with international law. Alter generates a list of fourteen propositions to start exploring the possibilities of explaining variations in the influence of international courts on state behavior. A very good starting point.

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                                                                                                                                                      • Ginsburg, Tom, and Richard H. McAdams. “Adjudicating in Anarchy: An Expressive Theory of International Dispute Resolution.” William and Mary Law Review 45 (2004): 1229–1339.

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                                                                                                                                                        This article uses game theory to explain the power of international adjudication by using a set of expressive theories (behavioral law and economics), showing how law can be effective without sanctions.

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                                                                                                                                                        • Guzman, Andrew T. “International Tribunals: A Rational Choice Analysis.” University of Pennsylvania Law Review 157 (2008): 171–235.

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                                                                                                                                                          Offers a game-theoretical approach to international courts and tribunals, submitting that they can encourage compliance with international obligations but also considering nonformal dispute resolution. Based on the model, Guzman explores various features of international tribunals and identifies those that increase effectiveness and those that reduce it.

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                                                                                                                                                          • Helfer, Laurence R., and Anne-Marie Slaughter. “Why States Create International Tribunals: A Response to Professors Posner and Yoo.” California Law Review 93 (2005): 899–956.

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                                                                                                                                                            Criticizes the shortcomings in the theory, methodology, and empirics in Posner and Yoo 2005 by challenging the idea that formally dependent international tribunals are correlated with effective judicial outcomes. Helfer and Slaughter develop a theory of “constrained independence,” in which states establish independent international tribunals to enhance the credibility of their commitments in specific multilateral settings, and then use more fine-grained structural, political, and discursive mechanisms to limit the potential for judicial overreaching.

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                                                                                                                                                            • Posner, Eric A., and John C. Yoo. “Judicial Independence in International Tribunals.” California Law Review 93 (2005): 1–74.

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                                                                                                                                                              The authors argue that the only effective international tribunals are “dependent” tribunals, meaning ad hoc tribunals staffed by judges closely controlled by national governments through the power of reappointment or threats of retaliation. Independent tribunals would endanger the cooperation of states.

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                                                                                                                                                              • Stephan, Paul B. “Courts, Tribunals, and Legal Unification: The Agency Problem.” Chicago Journal of International Law 3 (2002): 333–352.

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                                                                                                                                                                This article takes a principal-agent approach in order to explain delegation by states to international courts. It also examines the benefits of unification of norms by delegation to international tribunals versus national dispute resolution.

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                                                                                                                                                                International Organizations

                                                                                                                                                                International organizations are deemed to be crucial for international cooperation. They do raise many questions, however, including why states act through them (Voigt and Salzberger 2002), how states design them, what kind of principal-agent problems may arise, and whether states comply with their decisions (Simmons and Martin 2002). The rationalist approach to international law tries to answer those questions (Abbott and Snidal 1998, Helfer 2006, Thompson and Snidal 1999).

                                                                                                                                                                • Abbott, Kenneth W., and Duncan Snidal. “Why States Act through Formal International Organizations.” Journal of Conflict Resolution 42.1 (1998): 3–32.

                                                                                                                                                                  DOI: 10.1177/0022002798042001001Save Citation »Export Citation »E-mail Citation »

                                                                                                                                                                  This seminal article addresses the question of why states use formal organizations by investigating the functions they perform and the properties that enable them to perform those functions, using an institutionalist perspective that sees international organizations as enabling states to achieve their ends. Power and distributive questions, as well as the role of international organizations in creating norms and understanding, are examined, and a variety of examples are given.

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                                                                                                                                                                  • Helfer, Laurence R. “Understanding Change in International Organizations: Globalization and Innovation in the ILO.” Vanderbilt Law Review 59 (2006): 649–726.

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                                                                                                                                                                    Explains change in international organizations, drawing on the example of the International Labor Organization and discussing the different theories on change in international organizations.

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                                                                                                                                                                    • Simmons, Beth A., and Lisa L. Martin. “International Organizations and Institutions.” In Handbook of International Relations. Edited by Walter Carlsnaes, Thomas Risse, and Beth A. Simmons, 192–211. London: SAGE, 2002.

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                                                                                                                                                                      A good starting point to understand the rationalist approach to international organizations with plenty of references.

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                                                                                                                                                                      • Thompson, Alexander, and Duncan Snidal. “International Organization.” In Encyclopedia of Law and Economics. Vol. 2. Edited by Boudewijn Bouckaert and Gerrit De Geest, 692–722. Cheltenham, UK: Edward Elgar, 1999.

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                                                                                                                                                                        This encyclopedia article gives an overview on the approach rational institutionalists take toward international organization, and it is still the best starting point.

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                                                                                                                                                                        • Voigt, Stefan, and Eli M. Salzberger. “Choosing Not to Choose: When Politicians Choose to Delegate Power.” Kyklos 55.2 (2002): 289–310.

                                                                                                                                                                          DOI: 10.1111/1467-6435.00187Save Citation »Export Citation »E-mail Citation »

                                                                                                                                                                          A political economy analysis exploring when it makes sense for politicians to delegate to other branches of government or to international institutions.

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                                                                                                                                                                          Rational Design of International Institutions

                                                                                                                                                                          Traditionally, legal scholars and diplomats have designed international institutions. Increasingly, international relations scholars and economists (Goldstein, et al. 2001; Koremenos, et al. 2001) have asked questions about the rational design of institutions; that is, they treat international law as an explanandum. Why do states create international institutions, how much do they delegate, how many members do they admit, and how do they enforce norms? These are some of the questions examined. For anyone making suggestions about or criticizing the work of international institutions, these questions are important in understanding why they do or do not work.

                                                                                                                                                                          • Goldstein, Judith, Miles Kahler, Robert O. Keohane, and Anne-Marie Slaughter, eds. Legalization and World Politics. Cambridge, MA: MIT, 2001.

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                                                                                                                                                                            This book gathers an impressive collection of essays that were originally published in International Organizations, some of which are separately cited here (see Abbott and Snidal 2000, cited under Nonclassical Sources). It is mainly based on the questions of why and under what circumstances states choose which kind of institutions. As key variables it uses obligation, precision, and delegation. The essays also deal with special subject matters, such as the European Union, North American Free Trade Agreement, and World Trade Organization.

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                                                                                                                                                                            • Koremenos, Barbara, Charles Lipson, and Duncan Snidal, eds. The Rational Design of International Institutions. Cambridge, UK: Cambridge University Press, 2001.

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                                                                                                                                                                              This book gathers an impressive collection of essays on the rational design of international institutions. It is a must for every international lawyer trying to understand why and how international institutions are designed, and it allows for the consideration of why some work while others do not.

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                                                                                                                                                                              Special Issue Areas of International Law

                                                                                                                                                                              International economic law has been analyzed especially from a rational choice perspective. Here, not only the economic rationale, but also detailed legal analysis as well as jurisprudence have been the object of study. Also, international environmental law lends itself easily to economic analysis (public goods and externalities) and has been the subject of rational choice analysis for quite a while; the same holds true for security issues, although this has generally been an object of international relations. Other issues have been tapped more recently, such as international human rights law, terrorism, and diplomatic relations. Others have not yet been explored, such as humanitarian law and cultural protection.

                                                                                                                                                                              International Economic Law

                                                                                                                                                                              International economic law was the first issue area of international law in which rational choice analysis was applied. International economists have contributed a great deal to this debate, not only dealing with genuine economic topics, such as tariffs and quotas or financial markets, but also applying political economy and contract theory to international economic law, especially trade law. In addition, law and economic analysis was adopted by law scholars early on. Whereas trade law has been extensively analyzed from all angles, this is not the case yet for investment law.

                                                                                                                                                                              International Trade

                                                                                                                                                                              From a purely economic point of view, it is difficult to explain why states conclude trade liberalizing treaties, as it would be beneficial to liberalize unilaterally, except for big countries in which the terms of trade could be influenced by treaties (Bagwell and Staiger 1999). Grossman and Helpman 1995 develops a political economy story to explain why states conclude trade treaties by opening up the black-box state and analyzing internal interests and how they influence governments. Schropp 2009, meanwhile, presents a contract theory approach to international trade. There is an immense law and economic literature on the details of international trade norms, such as antidumping and subsidies rules, escape clauses, nondiscrimination obligations, technical barriers to trade, and international dispute resolution in the trade field. This bibliography can therefore only select some articles in this area. Best for an overview, although research has advanced since then, is Sykes 1999. There are joint projects between lawyers and economists to understand the World Trade Organization (WTO) and the jurisprudence of the Appellate Body. One was initiated by Petros Mavroidis, who is involved with the American Law Institute as a chief co-reporter on the principles of WTO law in which a law and economics analysis is taking place. Each case of the WTO is analyzed by a law scholar and an international trade economist (see website). Another one is the training program financed by the European Union for Law and Economic Analysis in “Dispute Settlement in Trade: Training in Law and Economics,” or DISSETTLE (see website).

                                                                                                                                                                              • Bagwell, Kyle, and Robert W. Staiger. “An Economic Theory of GATT.” American Economic Review 89.1 (1999): 215–248.

                                                                                                                                                                                DOI: 10.1257/aer.89.1.215Save Citation »Export Citation »E-mail Citation »

                                                                                                                                                                                Tells the terms of trade story of why states conclude trade treaties, by two prominent trade economists.

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                                                                                                                                                                                • Grossman, Gene M., and Elhanan Helpman. “Trade Wars and Trade Talks.” Journal of Political Economy 103.4 (1995): 675–708.

                                                                                                                                                                                  DOI: 10.1086/261999Save Citation »Export Citation »E-mail Citation »

                                                                                                                                                                                  Tells the political economy story of why states conclude trade treaties, arguing that such decisions depend on the internal policies of states. Again, an article by two prominent trade economists.

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                                                                                                                                                                                  • Schropp, Simon A. B. Trade Policy Flexibility and Enforcement in the World Trade Organization: A Law and Economics Analysis. Cambridge, UK: Cambridge University Press, 2009.

                                                                                                                                                                                    DOI: 10.1017/CBO9780511674570Save Citation »Export Citation »E-mail Citation »

                                                                                                                                                                                    An excellent application of contract theory to international trade, especially WTO law, dealing with all the substantive norms of WTO as well as enforcement of WTO law.

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                                                                                                                                                                                    • Sykes, Alan O. “International Trade.” In Encyclopedia of Law and Economics. Vol. 5. Edited by Boudewijn Bouckaert and Gerrit De Geest, 1114–1132. Cheltenham, UK: Edward Elgar, 1999.

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                                                                                                                                                                                      This encyclopedia article from Sykes, who is the most prominent law and economics scholar concerning international trade, still gives the best overview on economic analysis of law writing in trade, both on normative and positive economics. It is, regarding the mentioned literature, a bit outdated. It also mentions the several articles Sykes has written on detailed norms of international trade.

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                                                                                                                                                                                      • Trebilcock, Michael J., Robert Howse, and Antonia Eliason. The Regulation of International Trade. 4d ed. London and New York: Routledge, 2012.

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                                                                                                                                                                                        This book is a good introduction for economists and law students; it is the result of teaching both. It introduces the rules and institutions that govern international trade and examines the theory and functions of international institutions and blocs, including General Agreement on Tariffs and Trade, US Fair Trade Agreement, North American Free Trade Agreement, and the European Commission. It also discusses “trade and . . .” issues.

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                                                                                                                                                                                        International Investment Law

                                                                                                                                                                                        International investment law has become an important field of international economic law. Nonempirical, rational choice analysis was first conducted in Guzman 1998, followed by Elkins, et al. 2000, an empirical study. Many empirical studies have followed, focusing on the effect of investment treaties on foreign direct investment (UN Conference on Trade and Development 2009). Still, the question of how investment treaties should rationally be designed is an open and much-disputed question (van Aaken 2009). A first, more encompassing attempt to analyze the treaties from an economic perspective is found in Bonnitcha 2014.

                                                                                                                                                                                        • Bonnitcha, Jonathan. Substantive Protection under Investment Treaties: A Legal and Economic Analysis. Cambridge, UK: Cambridge University Press, 2014.

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                                                                                                                                                                                          An encompassing analysis of the economic consequences of central substantive provisions of investment treaties, extensively reviewing the literature and adjudication in international investment law. The book provides a normative framework for evaluating the optimal level of protection that states should grant to foreign investors under international investment agreements (IIAs), using criteria such as economic efficiency, foreign direct investment (FDI) attraction, environmental conservation, human rights realization, property rights protection, distributive justice, and governance. The author concludes that purely “economic” justifications for high investor protection as strong as assumed in the policy and academic discussions.

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                                                                                                                                                                                          • Elkins, Zachary, Andrew T. Guzman, and Beth Simmons. “Competing for Capital: The Diffusion of Bilateral Investment Treaties, 1960–2000.” International Organization 60.4 (2000): 811–846.

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                                                                                                                                                                                            A thorough empirical analysis as to why states sign investment treaties, explaining that the diffusion of those treaties is associated with competitive economic pressures among developing countries to capture a share of foreign investment.

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                                                                                                                                                                                            • Guzman, Andrew T. “Why LDCs Sign Treaties That Hurt Them: Explaining the Popularity of Bilateral Investment Treaties.” Virginia Journal of International Law 38 (1998): 639–688.

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                                                                                                                                                                                              This article tries to explain the apparent puzzle of why less developed countries sign investment treaties bilaterally instead of negotiating together for a multilateral investment treaty. Guzman applies game theory to the question.

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                                                                                                                                                                                              • UN Conference on Trade and Development. The Role of International Investment Agreements in Attracting Foreign Direct Investment to Developing Countries. Geneva, Switzerland: UN Conference on Trade and Development, 2009.

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                                                                                                                                                                                                Surveys the empirical evidence on the question of whether investment treaties cause more foreign direct investment, concluding that the evidence is mixed.

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                                                                                                                                                                                                • van Aaken, Anne. “International Investment Law between Commitment and Flexibility: A Contract Theory Analysis.” Journal of International Economic Law 12.2 (2009): 507–538.

                                                                                                                                                                                                  DOI: 10.1093/jiel/jgp022Save Citation »Export Citation »E-mail Citation »

                                                                                                                                                                                                  This article applies contract theory to the analysis of investment treaties for a first time and finds that they are not optimally designed with a view to flexibility.

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                                                                                                                                                                                                  International Environmental Law

                                                                                                                                                                                                  International environmental law lends itself perfectly to rational choice and economic analysis, because it is, as are all environmental problems, rife with public good, commons, and externality problems. Game theory and contract theory are also easily applicable to international environmental problems (Rao 2002, Sandler 1997). Situations of the tragedy of the commons in environmental law have been extensively analyzed since the publication of the seminal article Hardin 1968, and also critically discussed, as in Ostrom 1990.

                                                                                                                                                                                                  • Hardin, Garett. “The Tragedy of the Commons.” Science 162 (1968): 1243–1248.

                                                                                                                                                                                                    DOI: 10.1126/science.162.3859.1243Save Citation »Export Citation »E-mail Citation »

                                                                                                                                                                                                    Explains, using incentive analysis, why commons are overused, providing an argument for economists on why one should create property rights. One of the most cited articles in environmental economics.

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                                                                                                                                                                                                    • Ostrom, Elinor. Governing the Commons: The Evolution of Institutions for Collective Action. New York: Cambridge University Press, 1990.

                                                                                                                                                                                                      DOI: 10.1017/CBO9780511807763Save Citation »Export Citation »E-mail Citation »

                                                                                                                                                                                                      This book by the Nobel Prize–winning economist cum political scientist is the most encompassing one on the question of the problems of commons and how to solve them. Ostrom explains why property rights creation might not always lead to the desired results and presents a much more detailed analysis. A must for those dealing with (international) environmental law.

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                                                                                                                                                                                                      • Rao, Pinniti Krishna. International Environmental Law and Economics. Malden, MA: Blackwell, 2002.

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                                                                                                                                                                                                        The most encompassing book on rational choice analysis of international environmental law. Drawing on all tools of economics, including cost-benefit analysis, it treats all major multilateral environmental treaties, including the Kyoto Protocol, but is also concerned with compliance, monitoring, and effectiveness. Well suited for students but also for all those wanting to understand the underlying structure of international environmental law.

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                                                                                                                                                                                                        • Sandler, Todd. Global Challenges: An Approach to Environmental, Political, and Economic Problems. Cambridge, UK: Cambridge University Press, 1997.

                                                                                                                                                                                                          DOI: 10.1017/CBO9781139174886Save Citation »Export Citation »E-mail Citation »

                                                                                                                                                                                                          A very solid analysis of the basic problems of international governance, drawing on the standard tools of economics, especially game theory, and written by a renowned economist. It treats not only environmental problems, but also terrorism and other topics and is unique in clarifying on how economists think about solving public good problems.

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                                                                                                                                                                                                          International Human Rights Law

                                                                                                                                                                                                          International human rights law poses a theoretical puzzle for those attempting to analyze it with law and economics methods, especially if states are analyzed as a black box and internal, political economy arguments are not applied (see Goldsmith and Posner 2005, cited under General Overviews). A strategic interaction between states that can be modeled in game theoretical terms occur rather seldom, for example, when grave human rights violation spill over to other countries, or when minorities of one state are mistreated in another state. But because human rights treaties, although legally inter omnes obligations, are primarily a promise to the state’s own citizens, it is difficult to model them as a strategic game. Also, empirical studies have shown that international human rights treaties are not effective; rather, it is the variable of democracy that makes a difference to the human rights situation in countries (Hathaway 2002, Neumayer 2005). Hathaway 2007 and Simmons 2009 argue that international human rights treaties can nevertheless make a difference due to internal processes.

                                                                                                                                                                                                          • Hathaway, Oona A. “Do Human Rights Treaties Make a Difference?” Yale Law Journal 111.8 (2002): 1935–2042.

                                                                                                                                                                                                            DOI: 10.2307/797642Save Citation »Export Citation »E-mail Citation »

                                                                                                                                                                                                            A first empirical study on the effectiveness of human rights treaties, in which Hathaway also tries to test all international relations theories against the empirical result she finds. The article caused concern among international lawyers, though without leading to a more in-depth rational design by them.

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                                                                                                                                                                                                            • Hathaway, Oona A. “Why Do Countries Commit to Human Rights Treaties?” Journal of Conflict Resolution 51.4 (2007): 588–621.

                                                                                                                                                                                                              DOI: 10.1177/0022002707303046Save Citation »Export Citation »E-mail Citation »

                                                                                                                                                                                                              In this article, Hathaway examines states’ decisions to commit to human rights treaties. She argues that the effect of a treaty on a state, and hence the state’s willingness to commit to it, is predominantly determined by the domestic enforcement of the treaty and the treaty’s collateral consequences.

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                                                                                                                                                                                                              • Neumayer, Eric. “Do International Human Rights Treaties Improve Respect for Human Rights?” Journal of Conflict Resolution 49.6 (2005): 925–953.

                                                                                                                                                                                                                DOI: 10.1177/0022002705281667Save Citation »Export Citation »E-mail Citation »

                                                                                                                                                                                                                Tests the Hathaway 2002 data with different econometrical techniques and finds basically the same result.

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                                                                                                                                                                                                                • Simmons, Beth A. Mobilizing for Human Rights: International Law in Domestic Politics. Cambridge, UK: Cambridge University Press, 2009.

                                                                                                                                                                                                                  DOI: 10.1017/CBO9780511811340Save Citation »Export Citation »E-mail Citation »

                                                                                                                                                                                                                  This notable rationalist international relations scholar argues that international human rights law has made a positive contribution to the realization of human rights. Focusing on the stakeholders of rights, such as nongovernmental organizations, she demonstrates through a combination of statistical analyses and case studies that the ratification of treaties leads to better rights practices on average.

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