International Organizations in a World of Regional Trade Agreements: Lessons from Club Theory

Posted: 24 Jan 2007

See all articles by Michele U. Fratianni

Michele U. Fratianni

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy; Universita' Politecnica delle Marche

John C. Pattison

Canadian Imperial Bank of Commerce

Abstract

This essay deals with the challenge that international organizations face at the turn of the millennium. The basic insight from the theory of clubs and information theory is that coordination and cooperation require dominant providers. Cooperation becomes more difficult as players become more equal in economic size. Today's environment is less conducive to cooperation than the environment after World War II. By extension, club theory suggests that Regional Trade Agreements are not flukes. They have proliferated because cooperation is feasible in smaller groups with a few larger players. There is a significant risk, however, that regional blocs may replace the multilateral cooperative process. To reduce this risk we propose the creation of an inter-bloc international organization dedicated to reduce blocs' barriers to trade and finance.

Keywords: international organizations, cooperation, clubs, regional trade agreements

JEL Classification: D71, F13, F15

Suggested Citation

Fratianni, Michele and Pattison, John C., International Organizations in a World of Regional Trade Agreements: Lessons from Club Theory. The World Economy, Vol. 24, No. 3, pp. 333-358, 2001. Available at SSRN: https://ssrn.com/abstract=959235

Michele Fratianni (Contact Author)

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy ( email )

Bloomington, IN 47405
United States
812-855-3360 (Phone)
812-855-3354 (Fax)

Universita' Politecnica delle Marche ( email )

Piazzale Martelli, 8
60121 Ancona
Italy
39-071-2207120 (Phone)

John C. Pattison

Canadian Imperial Bank of Commerce ( email )

Commerce Court West
199 Bay St
Toronto, Ontario M5L 1A2
Canada

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