Formal Models of International Institutions

The past three decades have witnessed the development of a rich literature that applies the formal tools of game theory to understanding international cooperation and international institutions. We divide this literature into three “generations” of scholarship. With a few notable exceptions, the first generation used very simple models—2×2 normal form games—to understand why states need to cooperate and why they comply with their cooperative agreements under conditions of anarchy. This first generation unfortunately bogged down in the neorealist–neoliberal debate. Second-generation scholars began to use tailor-made models to address the neorealist–neoliberal debate and to turn to new questions, such as how international agreements are created and how domestic political divisions affect international cooperation. With answers to the key questions of how international agreements are created and complied with, third-generation scholars could turn to increasingly refined models to answer specific questions about international institutions, such as the proper size of multilateral agreements, how the gains of cooperation are distributed, whether flexibility provisions should be built into agreements, and the specific functions of international organizations.