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Bandwagon Effects in International Environmental Agreements

Author

Listed:
  • Jonas Werth

    (Ca’ Foscari University of Venice; BI Norwegian Business School)

  • Alessia Russo

    (University of Padua; CEPR)

  • Fabio Miessi Sanches

    (São Paulo School of Economics)

Abstract

This paper develops a dynamic model of environmental treaty formation with heterogeneous countries that allows for entry, exit and country specific uncertainty on the benefits from other countries ratifying the treaty. Using a dataset comprising the cross-section of ratification dates of global environmental treaties for 1980-2020, we structurally estimate the model's parameters. The estimates inform about the existence of strategic complementarity or substitutability in the formation of environmental treaties, which occur when the relative benefits from cooperation increase or decrease after the inclusion of an additional country. Through counterfactual experiments, we illustrate how mechanisms fostering strategic complementarity can expedite the establishment of a grand coalition in support of environmental treaties and quantify associated welfare gains.

Suggested Citation

  • Jonas Werth & Alessia Russo & Fabio Miessi Sanches, 2024. "Bandwagon Effects in International Environmental Agreements," Working Papers 2024: 19, Department of Economics, University of Venice "Ca' Foscari".
    • Handle: RePEc:ven:wpaper:2024:19
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    More about this item

    Keywords

    Dynamic Model Estimation; Heterogeneous Countries; International Environmental Agreement; Strategic Complementarity;
    All these keywords.

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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