Quarterly Journal of Political Science > Vol 5 > Issue 2

The Strategic Use of International Institutions in Dispute Settlement

Songying Fang, Department of Political Science, Rice University, USA, sfang@rice.edu
Suggested Citation
Songying Fang (2010), "The Strategic Use of International Institutions in Dispute Settlement", Quarterly Journal of Political Science: Vol. 5: No. 2, pp 107-131. http://dx.doi.org/10.1561/100.00009020

Publication Date: 11 Aug 2010
© 2010 S. Fang
International organization,  International conflict,  Formal modelling,  International political economy


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In this article:
Bargaining with a Threat of Appealing to an Institution 
The Model 
Equilibrium Analysis 
A High Capacity Institution 
A Low Capacity Institution 
Early Settlement in the WTO and Endogenous Application in the ICJ 
A Proofs of the Propositions 


How does the existence of an international institution change the strategic calculations of states engaged in an international dispute? This paper investigates the question by modeling an international institution as an alternative to bilateral bargaining for a dispute settlement. The equilibrium results show that only one of the two countries may find the option of appealing to an international institution attractive, and that the institution can influence the bargaining outcome even when it is not directly involved in settling the dispute. Moreover, the results show that countries condition their behavior on the type of the institution that they are dealing with: While a high capacity institution can induce cooperation, a low capacity institution does not. These findings have important implications for WTO reforms and provide an explanation for restrictive membership adopted by many significant international institutions.