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National Politics and International Agreements

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International agreements about transnational issues are difficult to reach, as the examples of the Copenhagen summit or the never-ending discussions of the future of the European Union make clear. In this paper, we relate this difficulty to the political process and the conflicts of interest attached to an agreement, both within and between national electorates, related to national income distributions. We set up a political economy model of a two-country world economy, where an international agreement on the financing of an international public good has to be negociated by two elected national delegates. We prove that any international agreement involves higher taxes in both countries than in the case of no-agreement. If reachable, an IA may generate losers in either country. If the political process involves a constraint on tax rates, an agreement may or may not be reached. Finally, when an agreement is reached, it may exhibit strategic delegation when the median voters are the Condorcet winners in both countries: this delegation is the outcome of the struggle by electorates to transfer the tax burden to the other country's taxpayers. In brief, the fate of an international agreements depends on national politics and distributive issues in the involved countries

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  • Hubert Kempf & Stéphane Rossignol, 2010. "National Politics and International Agreements," Documents de travail du Centre d'Economie de la Sorbonne 10052, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  • Handle: RePEc:mse:cesdoc:10052
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    Cited by:

    1. Arvaniti, Maria & Habla, Wolfgang, 2021. "The political economy of negotiating international carbon markets," Journal of Environmental Economics and Management, Elsevier, vol. 110(C).
    2. Alessandro Tavoni & Ralph Winkler, 2021. "Domestic Pressure and International Climate Cooperation," Annual Review of Resource Economics, Annual Reviews, vol. 13(1), pages 225-243, October.
    3. Andreas Freytag & Leo Wangler, 2008. "Strategic Trade Policy als Response to Climate Change? The Political Economy of Climate Policy," Jena Economic Research Papers 2008-001, Friedrich-Schiller-University Jena.
    4. Habla, Wolfgang & Winkler, Ralph, 2018. "Strategic delegation and international permit markets: Why linking May fail," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 244-250.
    5. Leo Wangler & Juan-Carlos Altamirano-Cabrera & Hans-Peter Weikard, 2013. "The political economy of international environmental agreements: a survey," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 13(3), pages 387-403, September.
    6. Alejandro Caparrós, 2016. "Bargaining and International Environmental Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(1), pages 5-31, September.
    7. Habla, Wolfgang & Winkler, Ralph, 2015. "Strategic Delegation and Non-cooperative International Permit Markets," Working Papers in Economics 636, University of Gothenburg, Department of Economics.
    8. Spycher, Sarah & Winkler, Ralph, 2022. "Strategic delegation in the formation of modest international environmental agreements," European Economic Review, Elsevier, vol. 141(C).
    9. Thomas Eichner & Rüdiger Pethig, 2021. "Climate Policy and Moral Consumers," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(4), pages 1190-1226, October.
    10. Loeper, Antoine, 2017. "Cross-border externalities and cooperation among representative democracies," European Economic Review, Elsevier, vol. 91(C), pages 180-208.
    11. Geum Soo Kim, 2013. "Lobbies Competition and Bilateral International Environmental Agreements," Korean Economic Review, Korean Economic Association, vol. 29, pages 81-96.

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    More about this item

    Keywords

    International agreements; bargaining; delegation; voting;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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