Economic Analysis of International Law

Economic Analysis of International Law

Edited by Eugene Kontorovich and Francesco Parisi

Through original and incisive contributions from leading scholars, this book applies economics and other rational choice methods to understanding public international law. The chapters cover a range of topics, from the sources of international law to means of enforcement. The application of economic analysis to public international law is still in its early stages, and Economic Analysis of International Law provides a useful overview, as well as setting directions for new research.

Chapter 7: Treaty enforcement

Paul B. Stephan

Subjects: economics and finance, law and economics, law - academic, law and economics, public international law


After a long history of neglect, both legal scholars and economists have studied treaty enforcement in recent years (Posner and Sykes 2011). Possible explanations for this methodological turn include the increase in number and salience of treaties that address subjects of long-standing interest to economists, including trade, investment and property rights (broadly conceived); innovative use of treaty claims in domestic litigation; and a general upswing in the use of economic tools by legal academics. Also significant is the growth within political science of rational choice analysis of international relations, including treaties. There exists substantial methodological congruence between rational choice approaches and positive economic analysis. As a result, a literature now exists that provides a foundation for both positive and normative assessment of treaty making and treaty enforcement, using the traditional economist’s toolbox. This chapter reviews the treatment in the scholarly literature of several positive questions: What mechanisms do states use to enforce treaties? What explains the choice of particular kinds of dispute resolution mechanisms? How does the choice of a treaty, rather than some other mechanism for creating a rule of international law, affect enforcement? Why do some, but not all, treaties invoke third-party dispute resolution as an enforcement mechanism? What explains the enforcement of treaties by domestic courts? It also examines research on the normative question of optimal treaty enforcement. International law comprises treaties and custom. Treaties are formal agreements between or among states that create obligations that states generally regard as legally binding.

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