Managing the Risks of International Agreement

Richard B. Bilder, Managing the Risks of International Agreement (University of Wisconsin Press, 1981)

Univ. of Wisconsin Legal Studies Research Paper No. 1327

159 Pages Posted: 18 Oct 2014

See all articles by Richard Bilder

Richard Bilder

University of Wisconsin Law School

Date Written: October 16, 2014

Abstract

Treaties and other international agreements are the principal means by which nations resolve their differences and arrange to cooperate with each other. But such agreements frequently involve uncertainty and risks — in particular, risks that the agreement may turn out to be less desirable or more costly than expected or that the other participant or participants may not carry out their side of the bargain. Unless diplomats and lawyers negotiating international agreements can find ways to design their proposed agreements so as to meet these concerns, negotiations may fail and the potential benefits of cooperation may be lost.

The premise of this book, written by a former attorney in the Office of the Legal Adviser of the U.S. Department of State, is that nations can overcome the obstacles that risks pose for cooperation through more effective treaty design and the appropriate use of risk management techniques. This book suggests a framework for analyzing the risks of international agreement and discusses a broad array of timeless techniques and treaty design strategies that can help states to manage such risks and achieve mutually advantageous cooperation.

The author first examines the nature and importance of international agreements, the different kinds of risks such agreements pose, and the broad options open to nations in dealing with problems of risk. He then turns to a detailed classification and analysis of various kinds of risk management and compliance-enhancing devices, including tacit and other nonbinding arrangements, deliberate ambiguity, third-party dispute settlement, waiver and withdrawal provisions, reservations, verification (including surveillance and inspection), order of performance, sanctions, escrow, hostage devices, and third-party guarantees. The author gives real-world examples of the various techniques and discusses their advantages and disadvantages. In conclusion, he points out limits of risk management techniques, discusses the relevance of attitudes of trust and distrust to problems of risk management, suggests ways in which risk management techniques can be made more effective, and emphasizes the need for further research and analysis — particularly empirical research — if we are to more fully understand these problems and help nations cooperate. An Appendix presents a checklist of the risk management techniques discussed.

Keywords: Treaties, International Agreements, Treaty Design, risk-management, international negotiation, structuring, compliance with international agreements, treaty compliance, international cooperation, diplomacy, dispute resolution, international law, foreign relations, foreign office legal advisors

JEL Classification: K33: International Law

Suggested Citation

Bilder, Richard, Managing the Risks of International Agreement (October 16, 2014). Richard B. Bilder, Managing the Risks of International Agreement (University of Wisconsin Press, 1981); Univ. of Wisconsin Legal Studies Research Paper No. 1327. Available at SSRN: https://ssrn.com/abstract=2510910

Richard Bilder (Contact Author)

University of Wisconsin Law School ( email )

975 Bascom Mall
Madison, WI 53706
United States

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