Risk in International Politics

Randall W. Stone
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Randall W. Stone: Randall Stone (Ph.D. Harvard, 1993) is Associate Professor of Political Science at the University of Rochester. His research is in international political economy and combines formal theory, quantitative methods, and qualitative fieldwork. He is the author of Lending Credibility (2002) and Satellites and Commissars (1996), as well as articles in the American Political Science Review, International Organization, International Studies Quarterly, the Journal of Conflict Resolution, and Review of International Organizations.

Global Environmental Politics, 2009, vol. 9, issue 3, pages 40-60

Abstract: Representative governments under-invest in public goods that provide insurance against risk, The combination of inequality and risk aversion guarantees that the payoffs to insurance are skewed, so the median voter prefers a sub-optimally low level of investment. The problem is exacerbated by supermajority requirements or the need for international coordination. This accounts for some of the characteristic shortcomings of domestic public policy and represents an important obstacle to international cooperation. The argument is illustrated with reference to the Kyoto Protocol and the International Monetary Fund. The argument implies that delegation to international organizations with risk-averse preferences may be welfare enhancing. (c) 2009 by the Massachusetts Institute of Technology.

Date: 2009

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