Coercive International Agreements


As we show in the document, the extent to which the sending government can commit not to circumvent the international organization`s dispute settlement process, which channels coercion, is a key factor in deciding whether it is possible to obtain concessions with multilateral coercion. To model the different strategic situations that may result from differences in the shipper`s ability to attach himself to the international organization, we study two other different variants of the previous model. In the first, the foreign government is not allowed to circumvent the dispute settlement procedure of the international organization. Therefore, multilateral coercion is the only option available. Dispute settlement in this case is modelled by allowing the foreign government to request the Land government before the international organization stops, and this adoption should cover the WTO dispute consultation phase. If the government of origin does not give in to the request of the foreign government, the international organization makes its decision while remaining inactive. Since our aim is to examine the effectiveness of weak international trade institutions – those that have no enforcement occupation and rely on the sending government to implement retaliatory measures itself – the Land government must not comply with the judgment and thus start a trade war. Our analysis shows that the commitment to the verdict of the international organization makes concessions more likely. Intuitively, the potential IO ruling caps the foreign government`s incentives to show its determination with high demands. As a result, they ask more moderate questions, which can be accepted by Home. In the second variant of the model, the foreign government is only partially committed to the dispute settlement process of the international organization, in the sense that at the beginning of the game it can choose between unilateral and multilateral coercion in an additional phase and commit to doing so.

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