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Self-enforcing international agreements and domestic policy credibility

By Paola Conconi and Carlo Perroni


We explore the relationship between international policy coordination and domestic policy credibility when both must be self-supporting. Our arguments are presented in the context of a two-country, two-period model of dynamic emission abatement with transboundary pollution, where government policies suffer from a time-consistency problem. In the absence of repeated interaction, any form of coordination – between governments, and between governments and their respective private sectors – improves policy making. Nevertheless, under repeated interaction international policy spillovers can make it possible to overcome the domestic credibility problem; and, conversely, the inability to precommit to policy domestically can help support international policy cooperation

Topics: HG, JZ
Publisher: University of Warwick. Centre for the Study of Globalisation and Regionalisation
Year: 2003
OAI identifier: oai:wrap.warwick.ac.uk:2005

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