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Free-riding in international environmental agreements: A signaling approach to non-enforceable treaties

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  • Ana Espínola-Arredondo

    ()
    (School of Economic Sciences, Washington State University, USA)

  • Félix Muñoz-García

    (School of Economic Sciences, Washington State University, USA)

Abstract

This paper examines countries' free-riding incentives in international environmental agreements (lEAs) when, first, the treaty is non-enforceable, and, second, countries do not have complete information about other countries' non-compliance cost. We analyze a signaling model whereby the country leading the negotiations of the international agreement can reveal its own non-compliance costs through the commitment level it signs in the IEA. Our results show that countries' probability of joining the IEA is increasing in the free-riding benefits they can obtain from other countries' compliance, and decreasing in the cost of not complying with the initial terms of the agreement. This paper shows that, when free-riding incentives are strong enough, there is no equilibrium in which all countries join the IEA. Despite not joining the IEA, however, countries invest in clean technologies. Finally, we relate our results with some common observations in international negotiations.

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Bibliographic Info

Article provided by in its journal Journal of Theoretical Politics.

Volume (Year): 23 (2011)
Issue (Month): 1 (January)
Pages: 111-134

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Handle: RePEc:sae:jothpo:v:23:y:2011:i:1:p:111-134

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Keywords: environmental agreements; non-binding negotiations; non-compliance cost; signaling games;

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  1. Ana Espinola-Arredondo, 2009. "Free-Riding and Cooperation in Environmental Games," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(1), pages 119-158, 02.
  2. Lange, Andreas & Vogt, Carsten, 2003. "Cooperation in international environmental negotiations due to a preference for equity," Journal of Public Economics, Elsevier, Elsevier, vol. 87(9-10), pages 2049-2067, September.
  3. Urs Steiner Brandt, 2003. "Unilateral Actions the Case of International Environmental Problems," Working Papers, University of Southern Denmark, Department of Environmental and Business Economics 40/03, University of Southern Denmark, Department of Environmental and Business Economics.
  4. Henk Folmer & Pierre Mouche & Shannon Ragland, 1993. "Interconnected games and international environmental problems," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 3(4), pages 313-335, August.
  5. Rubio, S. J. & Ulph, A., 2002. "An infinite-horizon model of dynamic membership of international environmental agreements," Discussion Paper Series In Economics And Econometrics 0210, Economics Division, School of Social Sciences, University of Southampton.
  6. Bac, Mehmet, 1996. "Incomplete Information and Incentives to Free Ride on International Environmental Resources," Journal of Environmental Economics and Management, Elsevier, vol. 30(3), pages 301-315, May.
  7. Whalley, John, 1991. "The Interface between Environmental and Trade Policies," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 101(405), pages 180-89, March.
  8. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-94, Supplemen.
  9. Scott Barrett, 1994. "The biodiversity supergame," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 4(1), pages 111-122, February.
  10. Putnam, Robert D., 1988. "Diplomacy and domestic politics: the logic of two-level games," International Organization, Cambridge University Press, Cambridge University Press, vol. 42(03), pages 427-460, June.
  11. Michael Hoel & Kerstin Schneider, 1997. "Incentives to participate in an international environmental agreement," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 9(2), pages 153-170, March.
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Cited by:
  1. Ana Espinola-Arredondo & Felix Munoz-Garcia, 2010. "Keeping Negotiations in the Dark: Environmental Agreements under Incomplete Information," Working Papers, School of Economic Sciences, Washington State University 2010-20, School of Economic Sciences, Washington State University.

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