The Design of International Agreements

States entering into international agreements have at theirdisposal several tools to enhance the strength and credibilityof their commitments, including the ability to make the agreementa formal treaty rather than soft law, provide for mandatorydispute resolution procedures, and establish monitoring mechanisms.Each of these strategies – referred to as ‘designelements’ – increases the costs associated withthe violation of an agreement and, therefore, the probabilityof compliance. Yet even a passing familiarity with internationalagreements makes it clear that states routinely fail to includethese design elements in their agreements. This article explainswhy rational states sometimes prefer to draft their agreementsin such a way as to make them less credible and, therefore,more easily violated. In contrast to domestic law, where contractualviolations are sanctioned through zero-sum payments from thebreaching party to the breached-against party, sanctions forviolations of international agreements are not zero-sum. Tothe extent that sanctions exist, they almost always representa net loss to the parties. For example, a reputational lossfelt by the violating party yields little or no offsetting benefitto its counter-party. When entering into an agreement, then,the parties take into account the possibility of a violationand recognize that if it takes place, the net loss to the partieswill be larger if credibility-enhancing measures are in place.In other words, the design elements offer a benefit in the formof greater compliance, but do so by increasing the cost to theparties in the event of a violation. When deciding which designelements to include, the parties must then balance the benefitsof increased compliance against the costs triggered in the eventof a violation.