The Design of Dispute Settlement Procedures in International Agreements

Abstract

What explains the inclusion of formal dispute settlement procedures in international agreements? Delegating any kind of decision making comes at a significant sovereignty cost, as Abbott and Snidal (2000: 436) note. From this perspective, instances of delegation are puzzling. Some legal scholars, however, argue that international law becomes more effective the more “lawlike” it is. Helfer and Slaughter (1997: 283), for instance, regard international tribunals as an integral part of “a global community of law.” From this perspective, the absence of dispute resolution mechanisms in some agreements is what begs an explanation. Based on game theory insights, Koremenos (2007) argues that the inclusion of dispute settlement procedures in international agreements is a deliberate choice by governments, made to address specific cooperation problems. The implication is that international law is designed efficiently: dispute settlement procedures are likely to be incorporated into agreements if, but only if, they are needed to solve specific problems. Her data confirm this viewpoint. Yet, some empirical observations potentially undermine this conclusion. Many formal dispute resolution mechanisms are rarely invoked in practice. This pattern is reinforced by the many agreements that couple formal dispute resolution mechanisms with explicit encouragements to settle informally through, for instance, “friendly” negotiations.1 Additionally, many formal dispute settlement mechanisms contain options to reject settlements lawfully, thereby rendering the formal mechanisms noncompulsory. Finally, states may attach reservations to their agreements,