When can dispute resolution decrease the level of obligation in an international agreement? The general assumption in international relations and international law is that dispute resolution is a commitment mechanism. Theoretical accounts maintain that dispute resolution provisions raise the reputational costs of breaching treaty rules. In empirical studies, dispute resolution provisions are treated as an indicator of greater obligation. This Article argues that dispute resolution provisions can sometimes make international legal obligation easier to breach, and that governments may design dispute resolution systems to facilitate breach, rather than deter it. Where dispute resolution systems include specific remedy provisions, the system may price breach, permitting states to deviate from the agreement so long as the remedy is paid. By selling an alternative to compliance, dispute resolution systems can decrease the reputational costs of breach and provide governments with great flexibility in meeting their international obligations. Within the international law and international relations fields, reputation is considered one of the primary means to promote state compliance with international rules and dispute resolution decisions. Despite disciplinary differences, both fields have independently emphasized the positive role of reputation in sustaining international cooperation without a centralized enforcement system. In addition, the conventional wisdom holds that formal dispute resolution heightens the reputational costs of noncompliance to governments. The logic is that states face greater reputational losses from noncompliance because a dispute resolution body authoritatively adjudicates whether a government has breached an agreement and then widely broadcasts the state's breach to the international audience. This is damaging to the state because it publicizes the state's noncompliance and thus reduces its future opportunities to form treaties. Drawing on this logic, some international law scholars argue that the potential reputational costs of having a dispute resolution institution are so significant that states are reluctant to establish international courts even if there would be some functional gains from having such a system.
展开▼
