Current international relations theory struggles to explain both the autonomy and transformation of international organizations (IOs). Previous theories either fail to account for any IO behavior that deviates from the interests of member states, or neglect the role of member states in reforming IO institutions and behavior. We propose an agency theory of IOs that can fill these gaps while also addressing two persistent problems in the study of IOs: common agency and long delegation chains. Our model explains slippage between member states' interests and IO behavior, but also suggests institutional mechanisms—staff selection, monitoring, procedural checks, and contracts—through which states can rein in errant IOs. We evaluate this argument by examining multiple institutional reforms and lending patterns at the World Bank from 1980 to 2000.

Much recent international relations scholarship has argued that states are unable to control e-commerce, so that private actors are coming to play a dominant role. However, this body of literature fails to account for emerging “hybrid institutions,” in which states create general frameworks of rules, which are then implemented by private actors. This article examines a prominent example of such an institution, the EU-U.S. Safe Harbor arrangement in the field of privacy, and sets out an alternative explanation of state–private actor relations in the sphere of e-commerce. It shows how Safe Harbor had its origins in efforts by the European Union (EU) and United States to mitigate problems of interdependence that threatened to undermine the principles of order on which their regulatory systems were based. Safe Harbor reflects neither the EU nor U.S. approach, but rather a novel blend of state and private regulation. The article demonstrates the vital role of argument and persuasion in identifying Safe Harbor as a solution, and in negotiating its particulars. It finds that conventional game-theoretic accounts of bargaining are unable to explain the negotiation of Safe Harbor, and argues that constructivist approaches should pay more attention to how argument can disclose new possibilities of action.

This article seeks to ground financial regulatory choices in domestic politics. Based on evidence from twenty-two industrialized countries, we argue that electoral rules—specifically, the extent to which they are centrifugal or centripetal—have a significant effect on whether the banks or their consumers pay for the security of the banking system. Moreover, despite the homogenizing effects of global financial integration, the political dynamics generated by these electoral rules continue to shape the nature and extent of prudential regulations that countries adopt in the place of banking cartels.

In the aftermath of war, what determines whether peace lasts or fighting resumes, and what can be done to foster durable peace? Drawing on theories of cooperation, I argue that belligerents can overcome the obstacles to peace by implementing measures that alter incentives, reduce uncertainty about intentions, and manage accidents. A counterargument suggests that agreements are epiphenomenal, merely reflecting the underlying probability of war resumption. I test hypotheses about the durability of peace using hazard analysis. Controlling for factors (including the decisiveness of victory, the cost of war, relative capabilities, and others) that affect the baseline prospects for peace, I find that stronger agreements enhance the durability of peace. In particular, measures such as the creation of demilitarized zones, explicit third-party guarantees, peacekeeping, and joint commissions for dispute resolution affect the duration of peace. Agreements are not merely scraps of paper; rather, their content matters in the construction of peace that lasts.

If different producer groups have divergent interests concerning macroeconomic policies, how do societal preferences translate into state policy outcomes? I develop and test a party-as-agent framework for understanding the importance of societal preferences with regard to monetary policy under capital mobility. Following the principal-agent model, political parties function as agents for different societal principals. Rightist parties tend to represent internationally oriented business groups with preferences for monetary convergence, while leftist parties do the same for domestically oriented groups preferring monetary autonomy under capital mobility. I present statistical evidence showing that OECD leftist governments have been associated with more monetary autonomy and currency variability than their rightist counterparts, even after controlling for basic economic indicators such as inflation. The statistical evidence also shows that societal group size tends not to explain either autonomous monetary policy choices or exchangerate stability. Thus even large and wealthy societal groups may be unable to obtain their preferred policy outcome when their respective partisan agents do not hold government power.

“The Rational Design of International Institutions” (special issue of IO, Autumn 2001) makes a significant contribution to the theoretical literature on international institutions. It is important, however, to recognize the limits of both the Rational Design project in its current form and the conclusions that can be drawn from the special issue about the project's usefulness and validity. This article evaluates the project on its own terms, as a rationalist attempt to explain variation in international institutions. I identify three significant sets of limitations: those of the scope of the project, those of the analytical framework, and those of the efforts that are made to evaluate the framework through empirical analysis. Although the first set of limitations is largely a matter of choice, the last two raise questions about how much of an advance the special issue in fact represents. Nevertheless, these shortcomings are not absolute—they can be remedied through further theoretical and empirical research.

We reply to John Duffield's critique of the Rational Design project, a special issue of International Organization that explains the features of international institutions from a game-theoretic perspective. The project was deliberately limited to the analysis of explicit and observable institutional arrangements, and focused on the specific institutional properties of centralization, membership, scope, control, and flexibility. Its empirical contribution relies on case studies, but it is significantly amplified by the tight connections provided by a common theoretical perspective that is oriented toward testing a set of specific conjectures about institutional design. The results raise further issues of measurement and cross-case comparisons that provide valuable lessons for future work on institutional design. Although all of these research design choices are worth revisiting and questioning, as Duffield does, the initial results of the Rational Design project show that it provides a good basis from which to explore alternative research design decisions.

The proof for “War Is in the Error Term,” a piece that appeared in the Summer 1999 issue of International Organization, contains a subtle error. Once the correction is made, there are broader implications for testing theories of war using quantitative studies. Large-n tests to verify the incomplete information explanation for war will be more difficult to perform than originally anticipated.