Rethinking the Rational Foundations of Supranational Governance: Lessons from the North American Free Trade Agreement

Why do states frequently act through supranational institutions, and why do these institutions look the way they do? While most studies emphasize the collective-gains rationale for delegated authority, the analysis presented here raises an altogether different possibility. What makes supranational dispute resolution systems, collective decision-making bodies, and the like so attractive is not -- at least not necessarily -- that they contribute to the overall efficiency of cooperation. Rather, I suggest, it is that they afford provide these regimes' "enacting coalitions" with a readily available means of moderating the high costs that cooperation imposes upon their domestic successors, thereby making these successors' continued participation in the regime somewhat less onerous than it might otherwise be. In this way, supranational institutions discourage the beneficiaries of cooperation -- but also, more importantly, the actors who do not benefit -- from working to subvert the new (cooperative) status quo should they ever find themselves in a position to do so. As a vehicle for making these points, the article explores the institutional origins of NAFTA, a supranational arrangement whose depth, scope, and sheer importance make it an ideal case for closer investigation. In closing, the author notes that the domestically-rooted insulation incentives discussed in this article may be stronger in some parts of the world (e.g., North America) than in others (e.g., Asia), suggesting a parsimonious explanation for the considerable variation we observe in each region’s preference for supranational delegation.