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Discovering Cooperation: A Contractual Approach to Institutional Change in Regional International Organizations

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  • Besir Ceka and Brian Burgo

Abstract

This paper offers a fresh perspective on institutional change drawing on recent advances in the economic theory of contracting. Contractual incompleteness enhances organizational flexibility, but only at the cost of perceptual ambiguity. We hypothesize that the willingness to engage in a highly incomplete contract depends on shared understandings which reduce the cost of perceptual ambiguity. These claims are evaluated using a new dataset on delegation of state authority to non-state actors in 35 regional international organizations from 1950 to 2010. We are able to confirm across a wide range of models and specifications that reform is guided by contractual incompleteness and that contractual incompleteness is rooted in shared historical experience.

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  • Besir Ceka and Brian Burgo, 2014. "Discovering Cooperation: A Contractual Approach to Institutional Change in Regional International Organizations," EUI-RSCAS Working Papers p0388, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    • Handle: RePEc:erp:euirsc:p0388
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    References listed on IDEAS

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    Cited by:

    1. Liesbet Hooghe & Gary Marks, 2015. "Delegation and pooling in international organizations," The Review of International Organizations, Springer, vol. 10(3), pages 305-328, September.

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