International Organization

Articles

An economic theory of mutually advantageous issue linkages in international negotiations

Robert D. Tollisona1 and Thomas D. Willetta2

a1 Professor of Economics and Senior Research Associate, Center for Study of Public Choice, Virginia Polytechnic Institute and State University. Dr. Tollison was formerly a Senior Staff Economist on the Council of Economic Advisers.

a2 Horton Professor of Economics, Claremont Graduate School and Claremont Men's College. Dr. Willett was formerly a Deputy Assistant Secretary and Director of International Monetary Research at the U.S. Treasury.

Abstract

There has been considerable interest in recent years in the question of issue linkages in international negotiations. What is significant about discussions of linkages in the present era is the stress put on making trade-offs explicit among issues. Most of the highly publicized cases of proposed issue linkages appear to have been motivated by attempts of individual countries or groups of countries to extend their dominant bargaining or veto power in one particular issue area into other areas so as to achieve maximum advantage from their whole array of international interactions. The existence of an additional rationale for linkage that relies upon mutual interest has important implications. Drawing on the economic theory of exchange, the use of issue linkages to facilitate the completion of a greater number of mutually beneficial agreements among nations is considered.