Conditionality, Separation, and Open Rules in Multilateral Institutions

Paola Conconi

December 2001

We examine the implications for the viability of multilateral cooperation of di¤erent legal

principles governing how separate international agreements relate to each other. We

contrast three alternative legal regimes: conditionality - making cooperation in one area a

condition for cooperation in another - separation - forbidding sanctions in one area to be

used to enforce cooperation in others - and open rules, i.e. absence of any restriction on the

patterns of cross-issue cooperation arrangements and sanctions. As an example, we focus on

a scenario where countries can enter into selective and separate binding trade and

environmental agreements with di¤erent partners. Our analysis suggests that conditionality

is more likely to facilitate multilateral, multi-issue cooperation in situations where the

environmental policy stakes are small relative to the welfare e¤ects of trade policies; when

the costs of environmental compliance are high, a conditionality rule can hinder multilateral

cooperation. Separation can undermine cooperation by limiting punishment, but can also

promote broad cooperation by making partial cooperation more di¢cult to sustain. Thus,

how di¤erent linkage regimes a¤ect multilateral negotiations depends on the structure of

cooperation incentives for the countries involved.

KEYWORDS: Multilateral Cooperation, Conditionality, Separation, Open Rules.

Address for correspondence:

Paola Conconi

Department of Economics

University of Warwick

Coventry, CV4 7AL, United Kingdom.

Tel: 44 (0)24 7657 2857.

Fax: 44 (0)24 7652 3032.

E-mail: P.Conconi@warwick.ac.uk.

Homepage: http://www.warwick.ac.uk/~ecren.