Credible commitment without independent regulatory agent: Evidence from the Security Council's United Nations Compensation Commission

Abstract

AbstractCredible commitment problems arise whenever decisions made according to short‐term incentives undermine long‐term policy goals. While political actors can credibly commit themselves to their long‐term policy goals by delegating decisions to independent regulatory agencies, the member states of international institutions rarely sacrifice control over regulatory decisions. Against the backdrop of the United Nations Compensation Commission established by the Security Council to settle claims on damage from the Iraqi occupation of Kuwait, we present an institutional arrangement that promises to credibly commit member states to their previously defined interests without excluding them from the decision process. It separates the stages of rulemaking and rule application, and is reinforced by conditional agenda‐setting of an advisory body. We probe the theoretical claim with evidence from a unique data set that shows that the Commission settled compensation claims in a remarkably consistent way. The arrangement provides a blueprint for comparable regulatory tasks in many areas of international, European, or domestic politics, in which independent regulation is not feasible.