Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76293
Authors: 
Conconi, Paola
Perroni, Carlo
Year of Publication: 
2003
Series/Report no.: 
CESifo Working Paper 988
Abstract: 
We explore the relationship between international policy coordination and domestic policy credibility when both must be self-supporting. Our arguments are presented in the context of a two-country, two-period model of dynamic emission abatement with transboundary pollution, where government policies suffer from a time-consistency problem. In the absence of repeated interaction, any form of coordination - between governments, and between governments and their respective private sectors - improves policy making. Nevertheless, under repeated interaction international policy spillovers can make it possible to overcome the domestic credibility problem; and, conversely, the inability to precommit to policy domestically can help support international policy cooperation.
Subjects: 
policy commitment
self-enforcing international agreements
Document Type: 
Working Paper

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