Reversing the Two Wrong Turns in the Economic Analysis of International Law

This article argues that law-and-economics research on international law has been limited by two methodological wrong turns. First, the literature generally assumes that the standard dilemmas of international cooperation do not apply to the European Union, on the grounds that the EU represents a single super- federation rather than an agreement among multiple countries. That position has proven implausible, however, in light of the recent unraveling of legal coordination across Europe. Second, the economic analysis of international law tends to assume that treaties are designed to facilitate the provision global public goods. That starting point is problematic as well, because a vast body of international agreements cover joint investments in club goods, which raise a distinct set of collective action problems. The broader claim of this article is that the two wrong turns in the economic analysis of international law are related, and correct each other when examined in parallel. The first half of the article shows how the theory of club goods can provide a unified explanation of all three waves of European disintegration: the Eurozone financial crisis, the collapse of Schengen Area border controls, and Brexit. The second half explains why analyzing EU treaties under that framework also clarifies the way that other international agreements dealing with club goods work. Specifically, it reveals that the legal elements which regulate entry and exit in those agreements serve radically different functions than are otherwise suggested by prevailing theories

Publication Date:
Feb 19 2019
Date Submitted:
Jun 28 2019
Berkeley Journal of International Law
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 Record created 2019-06-28, last modified 2019-08-05

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