Effects of funding mechanisms on participation in multilateral environmental agreements

Abstract

The “rational design approach” to studying international agreements holds that policy-makers evaluate costs and benefits of cooperation when designing treaties and subsequently deciding on participation. To influence this cost–benefit calculus, treaty designers sometimes include a fund from which financial assistance is provided to treaty members and to which treaty members contribute. We argue that the inclusion of a funding mechanism in a treaty can increase but also decrease the costs (benefits) of membership and can thus influence state choices on participation in both directions. Specifically, we argue that: (1) overall, states are more likely to join international agreements that include a fund; (2) the probability of joining is higher for agreements including a fund if contributions to the fund are voluntary; and (3) countries are more likely to join agreements including a fund that disburses assistance only to a select group of treaty members. We test these arguments using a new dataset with information on 154 countries’ ratification behavior toward 178 multilateral environmental agreements (MEAs) from 1950 to 2011. Our findings are in line with these arguments. The main policy implication is that MEA designers interested in maximizing treaty participation should include a formal funding mechanism and, in an effort to balance out positive and negative effects this might have on participation, base this mechanism on voluntary contributions and selective entitlements.