Posner and Sykes Book Symposium: Comment by Emilie Hafner-Burton and David Victor

[Emilie M. Hafner-Burton is a Professor at the School of International Relationship and Pacific Studies, IR/PS, at the University of California San Diego and Director of the Laboratory on International Law and Regulation. David G. Victor is a Professor at the School of International Relationship and Pacific Studies, IR/PS, at the University of California San Diego and Director of the Laboratory on International Law and Regulation.]

Over the last decade there has been a surge in scholarship on the economics of international law (see Goldsmith & Posner, Posner & Sykes, Guzman and Pauwelyn). On almost every topic in international law—from the practical import of customary law to the repayment of “odious debt” to the laws of war—the economic perspective offers important insights into how international law actually works. At last there’s one book to introduce the basic concepts and illustrate their utility.  Law students and academics, alike, will welcome Eric Posner and Alan Sykes’ Economic Foundations of International Law.

This new book will likely gain most of its readership in law schools, but for scholars the book’s greatest value may lie in helping to deepen communication between political scientists and lawyers who have been part of the “empirical turn” in research on international law. Posner and Sykes—and the method of economic analysis of law—will help political scientists disentangle the many ways that law affects behavior and actually measure those effects.  While quantitative empirical research will never reveal the full color of why states create and honor international law, this line of collaboration between lawyers and political scientists can help reveal exactly which types of international laws actually help states advance their interests and solve collective policy problems.

Big parts of this book will be familiar to political scientists, such as the treatment of international law on trade, investment and the environment—all areas where political scientists are very active. Other parts of this book open new ground.  For example, Posner and Sykes offer a detailed assessment of international legal standards regarding responsibility that states have when agents such as diplomats and military commanders misbehave.  Drawing upon analogies with corporate responsibility—a rich field of research in law and economics scholarship on domestic law—Posner and Sykes show that it can be efficient to hold states responsible when they, themselves, are able to monitor and enforce the actions of their agents.  This line of reasoning could open a field of research on different mechanisms of state responsibility.

Other new ground that Posner and Sykes help open is the interaction of international and domestic legal systems.  Political scientists, for decades, have been interested in the many links between domestic and international politics.  Most of that research, however, has looked to domestic settings as places where states realize and adjust their interests—in response, for example, to different pressure groups.  Posner and Sykes show that there are many aspects of domestic law—from the unusual practice in the United States of allowing aliens to sue U.S. corporations for violations overseas under the Alien Tort Statute (ATS) to universal jurisdiction for certain crimes that many countries now recognize—that could be amenable to more systematic empirical research.  Some of that work might usefully engage political scientists who do comparisons across countries.

As befits the intellectual origins of this research in the law and economics movement, Posner and Sykes evaluate law mainly as an instrument of economic policy.  For them, the central questions turn on economic efficiency and on whether states see practical, sustained benefits from participation in international legal arrangements.  This approach helps explain why this work will be easy for scholars from political economy and the so-called “rationalist” schools of political science to understand and accept.

The economic approach that Posner and Sykes elegantly describe also puts intellectual battle lines into sharp relief.  For scholars in law schools and political science departments who see other values in law—such as legitimacy and broader social order—the economic perspective will be branded as overly narrow and missing the central point of why law exists.  From the economic perspective, law and policy and state interests are fellow travellers; law works principally through reciprocity.  For scholars from other perspectives, a central role for law is exactly the opposite—to restrain narrow self-interest of states and to create order through expectations and not a grim strategy of reciprocal punishment.  These battles are particularly pitched over the question of customary law, and political scientists might find it useful to participate—for the most part, political science hasn’t much focused on custom.

Yet it is undeniable that an economic approach to studying law helps reveal new puzzles that are amenable to empirical research.  For example, when probing the question of compliance, Posner and Sykes point out that compliance, often, is a barrier to cooperation.  Known as the concept of “efficient breach” they suggest that holding states fully accountable for all legal obligations might actually undermine cooperation and collective problem solving in some cases.  For decades political scientists have been debating whether it is possible or even useful to study compliance with international legal agreements; perhaps “efficient breach” will advance that debate by revealing better how compliance and serious international cooperation interact.

The economic perspective could also help inform some of the emerging topics in the political science study of international law, such as the question why some areas of international cooperation are dominated by a single international institution—for example, international trade, at least until regional trade agreements began proliferating in the 1990s—while others are marked by much greater fragmentation.  For Posner and Sykes the answer lies in reciprocity and self-enforcement—a theme that runs throughout the book.  Because states align with agreements that are self-enforcing their analysis suggests that the default mode of international cooperation through law is bilateralism and small clubs.  Thus in areas of international cooperation where it is hard to create self-enforcing collective benefits fragmentation prevails.  Among the many illustrations in Posner and Sykes’ book are familiar topics of bilateral investment treaties—where some 3000 agreements have proliferated, although with lots of copying and use of common institutions such as ICSID—as well as international legal topics that political scientists haven’t much studied such as international cooperation on anti-trust where fragmented bilateral agreements are the norm.

Ever since the 1980s, if not earlier, political scientists and lawyers have been talking about collaboration in the study of international law.  With a few exceptions, we haven’t actually done much of that.  The empirical turn in the study of international law along with the simple but powerful insights from economic analysis of international law may raise the odds that these two fields learn more from each other.