INTERNATIONAL ENVIRONMENTAL AGREEMENTS - INCENTIVES AND POLITICAL-ECONOMY

International environmental agreements are increasingly important in a globalised economy. Beyond their specific interest, these agreements are also important in the context of coalition formation theory. Given the incentives to free ride, associated to the environment as a publi c good and to the presence of spillovers, the profitability and the op timality of environmental agreements are separated from their stabilit y (i.e. self-enforcement): hence, a whole set of political economy iss ues. This paper reviews the recent advances in this area. In particula r, it discusses mechanisms and strategies aimed at offsetting the ince ntives to free ride and increasing welfare, such as transfers, issue l inkages, threats and multiple agreements. The main results show that p artial coalitions and multiple agreements tend to prevail among subset s of players, and that agreements among all players are most unlikely to exist. The design of the agreements, moreover, can be crucial in de termining the number of signatory countries. (C) 1998 Elsevier Science B.V. All rights reserved.