Self Enforcing Voting in International Organizations, Issue 10102
National Bureau of Economic Research, 2003 - Corporate governance - 40 pages
Some international organizations are governed by unanimity rule, some others by a majority system. Still others have moved from one system to the other over time. The existing voting models, which generally assume that decisions made by voting are perfectly enforceable, have a difficult time explaining the observed variation in governance mode, and in particular the widespread occurrence of the unanimity system. We present a model whose main departure from standard voting models is that there is no external enforcement mechanism: each country is sovereign and cannot be forced to follow the collective decision, or in other words, the voting system must be self-enforcing. The model yields unanimity as the optimal system for a wide range of parameters, and delivers rich predictions on the variation in the mode of governance, both across organizations and over time.
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assume assumption best equilibrium common expected utility condition consider cost critical level decision denote deviator discount factor egalitarian endogenous enforceable voting rule enforcement is available equilibrium path European Union ex-ante symmetric external enforcement feasible first-best outcome first-best rule first-best voting rule future issues gain from cheating given voting rule governance mode governed by unanimity implies impure collective action incentive compatible incentive constraint international organizations issues are decided majority rule majority system maximizes mode of governance N(Zt NBER non-egalitarian rule non-excludable one-shot game optimal self-enforcing rule optimal self-enforcing voting optimal voting rule organization size players are ex-ante preferences Proposition pure collective action q(Zt result rule is unanimity satisfies self-enforcement constraint self-enforcing voting rule sensitive issues status quo status-quo equilibrium strategies stylized fact submajority rules sustainable switch take action transfers trigger punishment unanimity equilibrium unanimity rule unanimity system veil of ignorance vote sincerely voting rule q voting systems