Sustaining International Rules in a Multipolar World

Cecilia Carvalho, Nicolas Goulart, Daniel Monte and Emanuel Ornelas

No 21050, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study the sustainability of international trading rules in a multipolar world. A rules-based equilibrium is shaped by three forces. A static temptation to exploit market power undermines cooperation, while two dynamic forces support it: the efficiency gains from rules and the cost of reestablishing the regime once a country becomes hegemonic. When multipolarity is short-lived and involves few co-leaders, a strong enough prospect of future hegemony ensures rules cooperation. However, in a more fragmented world, the sustainability of rules is more likely if shared leadership is expected to persist, to ensure long-lasting efficiency gains.

JEL-codes: F02 F13 F53 H87 (search for similar items in EconPapers)
Date: 2026-01
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