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Multilateral institutions for international economic policy coordination: bargaining vs voting

Author

Listed:
  • Antonio J. Morales

    () (Universidad de Málaga, Plaza el Ejido s/n, 29013 Málaga, Spain CEMFI and CEPR, CEMFI, Casado del Alisal 5, 28014 Madrid, Spain)

  • A. Jorge Padilla

    () (Universidad de Málaga, Plaza el Ejido s/n, 29013 Málaga, Spain CEMFI and CEPR, CEMFI, Casado del Alisal 5, 28014 Madrid, Spain)

Abstract

We study a world economy where worldwide policy coordination is essential to optimally stabilize unfavorable common supply shocks. We develop a two-stage game to investigate how to implement the first-best response to these shocks via a multilateral institution, whose board of directors is composed of a representative per each member country. In a first stage, national governments nominate their representatives on the board. In a second stage, the board collectively chooses stabilization policies. We compare the relative merits of two collective choice mechanisms - bargaining and majority voting - in avoiding manipulation of the cooperative agreement through the strategic nomination of national representatives.

Suggested Citation

  • Antonio J. Morales & A. Jorge Padilla, 1999. "Multilateral institutions for international economic policy coordination: bargaining vs voting," Spanish Economic Review, Springer;Spanish Economic Association, vol. 1(3), pages 263-282.
  • Handle: RePEc:spr:specre:v:1:y:1999:i:3:p:263-282
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    Keywords

    Bargaining; coordination; institutions; majority voting; stabilization policy;

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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