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 8: The interaction between domestic and international law

Tom Ginsburg

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


The relationship between domestic and international law has been a favorite topic of international lawyers for over a century, and is of increasing political and legal salience (Nijman and Nollkaemper 2007). Yet it has been oddly neglected in much economic scholarship on international law. In part this is because of the enduring legacy of political science realism and its natural affinity with rational choice theory. Realism treated the state as a ‘billiard ball’ with unitary preferences that were then the subject of negotiation and interaction with other states on the international plane. The leading works on the economics of international law also tend to adopt a simple assumption of a unitary state actor (Goldsmith and Posner 2005; Guzman 2007: 19; Scott and Stephan 2006; Trachtman 2008:18). While appropriate for many modeling purposes, this approach misses many interesting dynamics that would benefit from more rigorous economic analysis. It is also in tension with the increasing recognition that compliance with international legal norms is typically driven in large part by domestic interests and institutions (Trachtman 2008: 20–1; Simmons 2009). State preferences on the international plane are in part the product of domestic politics and institutions, so that to fully understand international behavior, one must understand domestic structures and preferences. The reverse is also true. As transnational interest groups arise it makes less sense to speak of preferences as wholly domestically constituted. And international institutions can alter the structure of domestic institutions.

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