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

Author

Listed:
  • Ana Espínola-Arredondo

    (School of Economic Sciences, Washington State University, USA, anaespinola@wsu.edu)

  • Félix Muñoz-García

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

Abstract

This paper examines countries’ free-riding incentives in international environmental agreements (IEAs) 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.

Suggested Citation

  • Ana Espínola-Arredondo & Félix Muñoz-García, 2011. "Free-riding in international environmental agreements: A signaling approach to non-enforceable treaties," Journal of Theoretical Politics, , vol. 23(1), pages 111-134, January.
    • Handle: RePEc:sae:jothpo:v:23:y:2011:i:1:p:111-134
    DOI: 10.1177/0951629810391073
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    References listed on IDEAS

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    Cited by:

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    3. Carsten Helm & Franz Wirl, 2016. "Climate Policies with Private Information: The Case for Unilateral Action," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(4), pages 893-916.

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