Your Place or Mine? Institutional Capture and the Creation of Overlapping International Institutions

Abstract

Why do states create overlapping international institutions? This practice presents a puzzle: conventional wisdom suggests that states should use existing institutions to minimize the transaction costs of co-operation. This article proposes a bargaining approach to explain thede novocreation of overlapping international institutions. In this model, a dissatisfied ‘challenger’ state threatens to create a new institution, and a ‘defender’ state can propose to reform the currently focal institution. Overlapping institutions are created when the currently focal institution is (1) captured by interests opposed to the challenger and (2) domestic political pressure to abandon the status quo is intense. Similar to models of deterrence, the expectation that the new institution garners support among third parties is irrelevant for the equilibrium likelihood ofde novocreation. A comparative analysis of international bargaining over energy, whaling and intellectual property rights provides empirical evidence.