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
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
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