Re-election Incentives and the Sustainability of International Cooperation

Paola Conconi () and Nicolas Sahuguet ()

No 5401, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper examines the impact of policy-makers' horizons on the sustainability of international cooperation. We describe a prisoners' dilemma game between two infinitely-lived organizations (countries) run by agents (policy-makers) with a shorter tenure. The agents' mandates are finite but potentially renewable and staggered across different organizations. We show that the efficient cooperative equilibrium is only sustainable when policy-makers are re-electable. Moreover, re-election incentives can act as a discipline device, making it easier to sustain cooperation between policy-makers with renewable mandates than between policy-makers who are automatically re-elected. However, if the chances of re-election depend significantly on recent performance, policy-makers will collude to get re-elected. In this case, term limits may help to sustain international cooperation.

Keywords: overlapping generations; re-election incentives; self-enforcing cooperation (search for similar items in EconPapers)
JEL-codes: C72 D72 F0 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm and nep-pol
Date: 2005-12
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