Working Paper: NBER ID: w10249
Authors: Kyle Bagwell; Robert W. Staiger
Abstract: What are the sovereign rights of nations in an interdependent world, and to what extent do these rights stand in the way of achieving important international objectives? These two questions rest at the heart of contemporary debate over the role and design of international institutions as well as growing tension between globalization and the preservation of national sovereignty. In this paper, we propose answers to these two questions. We do so by first developing formal definitions of national sovereignty that capture features of sovereignty emphasized in the political science literature. We then utilize these definitions to describe the degree and nature of national sovereignty possessed by governments in a benchmark (Nash) world in which there exist no international agreements of any kind. And with national sovereignty characterized in this benchmark world, we then evaluate the extent to which national sovereignty is compromised by international agreements with specific design features. In this way, we delineate the degree of tension between national sovereignty and international objectives and describe how that tension can be minimized and in principle at times even eliminated through careful institutional design.
Keywords: No keywords provided
JEL Codes: F1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| international trade agreement that specifies permissible levels for a subset of a government's policies (F13) | compromises that government's sovereignty over at least as many instruments as it preserves (H13) |
| direct negotiation of policy instruments (F13) | loss of sovereignty (H13) |
| market access agreement can achieve international efficiency without compromising national sovereignty (F13) | allows governments to maintain unilateral control over their policy choices (H13) |
| nondiscrimination rule (e.g., MFN requirement) does not compromise national sovereignty (F52) | affects market access choices that lack interdependence sovereignty and Westphalian sovereignty (F55) |
| nondiscriminatory agreements (J79) | preserve interdependence and Westphalian sovereignty of small countries (F55) |