Multilateral institutions for international economic policy coordination: bargaining vs voting

Antonio Morales () and A. Jorge Padilla ()
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A. Jorge Padilla: Universidad de Málaga, Plaza el Ejido s/n, 29013 Málaga, Spain CEMFI and CEPR, CEMFI, Casado del Alisal 5, 28014 Madrid, Spain

Spanish Economic Review, 1999, vol. 1, issue 3, 263-282

Abstract: We study a world economy where worldwide policy coordination is essential to optimally stabilize unfavorable common supply shocks. We develop a two-stage game to investigate how to implement the first-best response to these shocks via a multilateral institution, whose board of directors is composed of a representative per each member country. In a first stage, national governments nominate their representatives on the board. In a second stage, the board collectively chooses stabilization policies. We compare the relative merits of two collective choice mechanisms - bargaining and majority voting - in avoiding manipulation of the cooperative agreement through the strategic nomination of national representatives.

Keywords: Bargaining; coordination; institutions; majority voting; stabilization policy (search for similar items in EconPapers)
JEL-codes: D78 E61 F42 (search for similar items in EconPapers)
Date: 1999-12-10
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