INTERNATIONAL COOPERATION REVISITED: TRANSACTION COSTS, THE SWISS CONFEDERATION OF 1815, AND BEYOND

In: Politics & policy, Band 28, Heft 4, S. 669-700

Abstract

This study makes use of a political economy/rational choice framework to shed light on the nature of cooperative security arrangements in the international environment. It argues that states choose among security arrangements with varying degrees of structural commitment and that two factors are crucial in explaining the degree of institutionalization elected—the level of threat in the international system and the magnitude of transaction costs. Since there is no common metric, like price, to ascertain the degree of transaction costs that allies are confronted with, the study relies on three proxy measures: uncertainty, heterogeneity, and asset specificity. Focusing on Swiss security provisions at the end of the Napoleonic Wars and drawing on the findings of two security arrangements examined in a larger study—the German Confederation of 1815 and the founding of NATO—the analysis shows that, when exposed to serious external threat and high transaction costs, states give rise to sophisticated, binding security structures. To demonstrate the broad applicability of the transaction costs framework, the concluding section sketches recent integrative moves within the European Union.