The Rise of Bargaining Coalitions in Multilateral Regimes

• In Event: Formal Models of International Politics

Abstract

A recent, though little-understood, trend in multilateral bargaining between states is the rise of coalitions, groups of states that join together to bargain more or less as a single unit. Across contexts negotiating blocs vary not only in the positions they adopt (or the issues they seek to advance) but also in the size and heterogeneity of their membership. Why do some states form broad coalitions with obvious veto power while others instead form narrow, issue-specific coalitions ostensibly with little hope of influencing negotiations?

To explore these questions I develop an infinite horizon model of coalitional bargaining, combining approaches from existing theories of coalition formation and legislative bargaining. In each stage, a set of states first have the opportunity to form coalitions, delegating decision making authority to a single representative member who as a result controls the votes of all member states. Next, a proposer is randomly selected from the set of resulting coalitions. This proposer makes an offer to the remaining coalitions consisting of a division of the (exogenous) surplus to cooperation. If the offer is rejected, then a status quo payoff is realized and the game moves to the next stage. Bargaining continues until an offer is accepted by the minimum required number of states.

I show that equilibrium coalition formation depends on the distribution of proposal power across states. States with a low probability of being selected as proposer optimally band together with similar states to form small coalitions. These coalitions can be easily bought and so are likely to be included in any minimal winning coalition. In contrast states with greater proposal power optimally form larger, blocking coalitions. These states are unlikely to be included in any winning coalition unless one of their own is selected to propose. Forming a larger coalition then guarantees that bargaining will continue until this occurs and as a result all coalition members receive a share of the surplus to cooperation.

I illustrate the plausibility of the model's predictions through case studies of coalitional bargaining in the multilateral regimes for international trade and climate change cooperation. I also discuss implications of the theory for the recent rise to prominence of coalitions in both contexts. Overall the work contributes to our understanding of the strategies states employ in multilateral bargaining as well as the dynamics of bargaining between states and the resulting prospects for success or failure.

Author

• Amanda Kennard, New York University