Courts as Coordinators
Why do states build international courts, submit cases, and enforce court judgments? This article examines the role of a court that is neither a â€œdeciderâ€ nor an â€œinformation provider.â€ Litigation is costly and does not reveal private information. The courtâ€™s ruling is not binding and bargaining can occur before and after the court has ruled. Nevertheless, an alternative dispute resolution mechanism emerges: court rulings can coordinate endogenous multilateral enforcement. Disinterested states will enforce to ensure that they can profitably use the court in the future. Accepting jurisdiction of the court allows a state to make efficiency-enhancing â€œtrades,â€ winning high-value disputes in exchange for losing low-value disputes. This is possible because litigation is a screening device: states only sue when they derive relatively high value from the disputed asset. The use of the court as a coordination device for multilateral enforcement allows for the existence of a court with endogenous enforcement and jurisdiction.
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