Multilateralism, Bilateralism, and Exclusion in the Nuclear Proliferation Regime

I use the nuclear proliferation regime to show that dyadic diplomacy is not necessarily incompatible with the building of a multilateral regime; bilateralism is not the opposite of multilateralism, but an efficient component thereof. Although this point will not be new to most students of institutions, no general rationale has so far been offered on the complementarity of bilateral and multilateral diplomacy. Starting from a characterization of proliferation as the result of a large number of prisoner's dilemmas played out between states engaged in local dyadic rivalries, I demonstrate that it is possible for the superpowers to design an optimal mix of threats and bribes in which states with low compliance costs join the regime on the terms of the multilateral treaty alone; states with intermediate compliance costs need additional customized incentives, delivered through bilateral agreements; and states with high compliance costs are not only left out of the regime but also punished for nonparticipation. I draw a few comparative statics that I systematically test on Nuclear Proliferation Treaty (NPT) membership data. I discuss the applicability of the model to the currency, trade, and aid regimes.