Journal Article

Estimating Strategic Models of International Treaty Formation

Ulrich J. Wagner

in The Review of Economic Studies

Volume 83, issue 4, pages 1741-1778
Published in print October 2016 | ISSN: 0034-6527
Published online February 2016 | e-ISSN: 1467-937X | DOI: http://dx.doi.org/10.1093/restud/rdv054

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This article develops an empirical framework for analysing the timing of international treaties. A treaty is modelled as a dynamic game among governments that decide on participation in every period. The net benefit of treaty membership increases over time. Spillovers among members and non-members accelerate or delay treaty formation by transforming participation into a strategic complement or substitute, respectively. The predictions of the model inform the estimation of the structural parameters, based on a cross section of treaty ratification dates. With this approach, I estimate the sign and magnitude of strategic interaction in the ratification of the Montreal Protocol, in the formation of Europe's preferential trade agreements, and in the growth of Germany's network of bilateral investment treaties. Through a series of counterfactual experiments, I explore different mechanisms that give rise to strategic interaction in the formation of these treaties.

Keywords: Dynamic game; strategic interaction; structural estimation; International environmental agreement; preferential trade agreement; bilateral investment treaty; international relations; C51; F53; F18; Q58; H41; K33

Journal Article.  20472 words.  Illustrated.

Subjects: Econometric Modelling ; International Relations and International Political Economy ; International Trade ; Environmental Economics ; Publicly Provided Goods ; International Law

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