Free-riding in International Environmental Agreements: A Signaling Approach to Non-Enforceable Treaties

Ana Espinola-Arredondo and Felix Munoz-Garcia

No 2009-08, Working Papers from School of Economic Sciences, Washington State University

Abstract: This paper examines countries’ free-riding incentives in international environmental agreements (IEAs) when, first, the treaty is non-enforceable, and second, countries do not have complete information about other countries’ noncompliance cost. We analyze a signaling model whereby the country leading the negotiations of the international agreement can reveal its own noncompliance costs through the commitment level it signs in the IEA. Our results show that countries’ probability to join the IEA is increasing in the free-riding benefits they can obtain from other countries’ compliance, and decreasing in their own noncompliance costs. This paper shows that, when free-riding incentives are strong enough, there is no equilibrium in which all types of countries join the IEA. Despite not joining the IEA, countries invest in clean technologies. Finally, we relate our results with some common observations in international negotiations.

Keywords: Signaling games; environmental agreements; nonbinding negotiations; noncompliance cost (search for similar items in EconPapers)
JEL-codes: C72 D62 Q28 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2009-03
New Economics Papers: this item is included in nep-cta, nep-env and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Free-riding in international environmental agreements: A signaling approach to non-enforceable treaties (2011)
Working Paper: Free-riding in International Environmental Agreements: A Signaling Approach to Non-Enforceable Treaties (2009)
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