The Political Economy of Global Multilateralism

Abstract

This paper offers a theory rooted in political economy to determine when global multilateralism is justified. Its criteria for justification are three. First, multilateral agreements ideally should offer mutual gains for all the nations that are parties to them. If the gains are not contingent on being part of the multilateral agreement, principles of subsidiarity militate against joining. Second, ideally multilateral treaties should help nations be governed by what Mancur Olson called their encompassing interest- their diffuse citizenry rather than special interests. One important way of achieving this goal is to increase jurisdictional competition among nations which is, in my view, the defining virtue of sovereignty. For instance, trade agreements can increase jurisdictional competition by making capital more mobile. Finally, multilateral agreements should not require a complex and intrusive international enforcement apparatus, because distant international bureaucracies are likely to be captured by special interests and thus reduce the power of encompassing interests in national governance.

Using these criteria, the paper evaluates multilateralism in trade, human rights, regulation, criminal law, and military intervention. It concludes that trade multilateralism is currently the best form of global multilateralism because it can extend exchange through sustaining a global market and can empower encompassing interests. Other forms of global multilateralism may sometimes be necessary but even such instances will rarely have the cascading benefits of trade multilateralism.