DP5762 Do Credible Domestic Institutions Promote Credible International Agreements?

Author(s): Paola Conconi, Carlo Perroni
Publication Date: July 2006
Keyword(s): domestic policy commitment, international agreements
JEL(s): F02, F10
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=5762

We examine the relationship between international policy coordination and domestic policy reputation when both are self-sustaining. We show that domestic policy commitment does not necessarily facilitate international cooperation; rather, efficient polices may be most easily sustained when countries are unable to pre-commit to policy domestically. Moreover, lack of domestic commitment is more likely to facilitate international cooperation the larger are the international spillovers of domestic policies.