Economic determinants of multilateral environmental agreements and their timing

Abstract

This dissertation examines the economic factors that contribute to countries’ cooperation on multilateral environmental agreements (MEAs). Our results indicate that extensive economic interactions may help countries overcome potential free-riding problems and work together on international environmental issues. We first examine the likelihood a pair of countries enters into the same MEA as well as the number of MEAs they both share using a near universe of agreements. We then separately examine the MEAs dealing with pollution issues and those dealing with resource issues. At last, we examine how long it takes two countries to have their first agreement since 1950 and how long it takes them to have an additional one conditional on already having had some agreements. Our MEA data come from Ronal Mitchell’s International Environmental Agreements Database (2002-2016). The main results are summarized as follows. First, we find that two countries are more likely to have an MEA or have more of them if they are economically larger and of similar economic size, closer in distance, have a preferential trade agreement, and trade more. These results are strongest for environmental agreements between a small number of countries. Second, we show that these economic factors have similar effects on the formation of pollution related agreements and resource related ones. We also show that there exists a spillover effect between countries’ cooperation on these two types of agreements. Third, we find that economic size, distance, and trade integration variables shift the hazard of two countries having their first agreement as well as subsequent ones. Moreover, we show that countries’ likelihood of cooperating on an additional agreement is much larger than the likelihood of having their first one.