The Benefit-Cost Theory of Institutional Choice

• In Event: The Politics of Institutional Choice

Abstract

Since 1990, the number of informal international institutions has more than quadrupled. During this same period, the number of formal international organizations has plateaued. In addition to their prevalence, informal bodies, which do not entail binding commitments or organizational machinery, have also grown in prominence. Informal Intergovernmental Organizations, such as the G20 and BRICS, provide vital centres for high-level international cooperation. Meanwhile, lower-level trans-governmental networks, such as the Container Security Initiative, facilitate cooperation among regulators and national technical experts.

To explain this remarkable development, we develop a Benefit-Cost Theory of Institutional Choice. We argue that advances in Information and Communication Technology and Transportation (ICTT) in terms of both lower costs and higher quality have made new forms of governance feasible and increasingly attractive for international governance. While these possibilities first opened up in the 19th century with faster land and sea transportation, they took off in the 20th century -- especially in the post war period with air transportation and improved telegraphy in the form of Telex. The emergence of internet technologies underpinned the growth of governance through intergovernmental networks and the use of summitry to govern through informal international organizations. We use the theory to explain institutional choices and design from the late 19th to the early 21st centuries.

Authors

• Duncan Snidal, Nuffield College, Oxford

• Michael W. Manulak, Carleton University