Adjudicating in anarchy: an expressive theory of international dispute resolution.

• Author: Ginsburg, Tom

TABLE OF CONTENTS INTRODUCTION I. THE PUZZLE OF COMPLIANCE WITH INTERNATIONAL ADJUDICATION A. Unexplained Compliance with International Dispute Resolution B. The Broader Puzzle of Compliance Without Sanctions II. THE COORDINATING FUNCTION OF ADJUDICATION A. The Pervasive Problem of Coordination 1. Coordination in the Iterated Prisoners" Dilemma Game 2. Coordination in the Hawk/Dove Game B. The Emergence of "Imperfect" Conventions in Iterated Coordination Games 1. The Evolution of Conventions: Background 2. The Imperfect Nature of Conventions: The Problem of Ambiguity a. Conventional Ambiguity b. Factual Ambiguity C. "Perfecting" Conventions Without Sanctions: Two Forms of Third-Party Expressive Influence 1. How Third-Party "Cheap Talk" Influences Behavior in Coordination Games: The Focal Point Theory a. An Introduction to Cheap Talk and Focal Points b. Using Third-Party Cheap Talk to Construct a Focal Point c. Using Cheap Talk to Clarify Conventions: Resolving Conventional Ambiguity 2. How Third-Party Signaling Influences Behavior in Iterated Coordination Games: The Informational Theory D. The Demand for Expressive Adjudication and the Synergy Between Cheap Talk and Signaling 1. The Demand for Adjudication (and the Need for Signaling) 2. The Need for Cheap Talk (and Why Adjudicators Do Not Distinguish Their Signals from Their Cheap Talk) E. The Limits of Expression and the Need for Legal Sanctions III. APPLYING THE MODELS: THE EXPRESSIVE EFFECT OF INTERNATIONAL DISPUTE RESOLUTION A. A Brief History of Interstate Dispute Resolution B. Three Pre-ICJ Case Studies 1. Eastern Greenland a. History b. Ambiguities c. Results 2. Palmas Island Arbitration a. History b. Ambiguities c. Results 3. Conciliation of Japanese Loans a. History b. Ambiguities c. Results C. The International Court of Justice 1. Background of the ICJ 2. The ICJ as Coordinator: Evidence of Compliance 3. The ICJ as Coordinator: Types of Cases a. Border Disputes b. Other Property-Type Disputes c. Diplomatic and Other Immunities 4. The Limits of the ICJ: The Use of Force CONCLUSION Frequent compliance with the adjudicative decisions of international institutions, such as the International Court of Justice (ICJ), is puzzling because these institutions do not have the power domestic courts possess to impose sanctions. This Article uses game theory to explain the power of international adjudication via a set of expressive theories, showing how law can be effective without sanctions. When two parties disagree about conventions that arise in recurrent situations involving coordination, such as a convention of deferring to territorial claims of first possessors, the pronouncements of third-party legal decision makers--adjudicators--can influence their behavior in two ways. First, adjudicative expression may construct focal points that clarify ambiguities in the convention. Second, adjudicative expression may provide signals that cause parties to update their beliefs about the facts that determine how the convention applies. Even without the power of sanctions or legitimacy, an adjudicator's focal points and signals influence the parties' behavior. After explaining the expressive power of adjudication, this Article applies the analysis to a range of third-party efforts to resolve international disputes, including a comprehensive review of the docket of the International Court of Justice. We find strong empirical support for the theory that adjudication works by clarifying ambiguous conventions or facts via cheap talk or signaling. We claim that the theory has broad implications for understanding the power of adjudication generally.

INTRODUCTION

In 1872, an international arbitral tribunal set up by treaty ruled that Great Britain had to pay $15.5 million to the United States for damages caused by a ship, the Alabama, built in Britain and sold to the Confederacy during the Civil War. (1) The panel had no means of enforcing its judgment, but Great Britain duly complied, launching the modern era of interstate dispute resolution. (2) Almost a century later, the International Court of Justice (ICJ) decided a case that facilitated the delimitation of the continental shelf between Germany, Denmark, and the Netherlands, ending a high stakes dispute and allowing those countries to proceed in developing gas and mineral resources. (3) Quite recently, the ICJ helped resolve a diplomatic feud related to Belgium's attempt to arrest a former Minister of Foreign Affairs from the Congo. (4) In each of these cases, and many more, international adjudication successfully resolved significant conflict between nations. Adjudication generated compliance notwithstanding the absence of external sanctions to enforce the decisions. Compliance without centralized sanctions contradicts our conventional image of how legal systems operate. The result is a puzzle at the heart of international law. Given the so-called "anarchic" (5) environment of international relations, why would nations bother to comply with the decisions of international tribunals?

This question is part of a larger one. In recent years, political scientists and international lawyers have identified compliance with international law as the central problem for analysis. (6) Despite high profile instances of noncompliance, most writers seem to agree with Louis Henkin's famous assessment that "almost all nations observe almost all principles of international law and almost all of their obligations almost all of the time." (7) Scholars disagree, though, on precisely why nations do so. Traditional international lawyers contend that international law works because it is perceived largely as morally authoritative and legitimate. (8) Realists have long contended that international law is epiphenomenal, that nations generally comply only because their international obligations are usually congruent with national interests. (9) Finally, institutionalists claim that international institutions influence state behavior by facilitating communication and disseminating information about member nations. (10) The choice between these theories goes to the heart of whether international law matters: only by knowing the reasons for compliance can we assess whether international law has the potential to become a powerful independent force in world affairs.

To date, however, the focus of the compliance literature has been almost exclusively on primary compliance with international norms, embodied either in customary international law or in treaty obligations. (11) Relatively neglected is the question of secondary compliance: why states comply with decisions rendered by international courts. This is the question we address. Stated differently, this Article seeks to explain why some states are willing to comply with their primary international obligations only after a third party adjudicator has articulated those obligations.

Our approach is both theoretical and empirical. The explanation we offer is rooted in game theory, which has been used successfully in a variety of problems in international organization. With few exceptions, however, the central game concept has been the prisoners' dilemma. This Article focuses on a different concept--coordination. Coordination games describe situations where parties have fully or partially common interests that can be achieved only if they coordinate their strategies among multiple possible equilibria. (12) Below, we explain why we think this model more closely approximates many strategic situations in the real world. This Article seeks to move coordination to a central place in the evolving study of international law and institutions.

A focus on coordination produces the Article's principle theoretical contribution--an expressive theory of adjudication. Our expressive claim has four steps. First, we contend that the need for coordination is pervasive, even in situations of international conflict. For example, when the value of disputed territory is low relative to the costs of military action, international competition for territory takes the form of a coordination game known as Hawk/Dove. In this case, each nation prefers to gain the territory by having the other side defer to its claim, but each considers the worst possible outcome to be a military conflict resulting from mutual claims to the territory. Thus, despite their conflicting interest over territory, the parties may have a common interest in avoiding war.

Second, we use evolutionary game theory to explain how conventions emerge over time--even in a state of anarchy--from the interactions of players in coordination situations. (13) Such conventions often benefit players by avoiding conflict and maintaining cooperation. For example, for those territorial disputes that take the form of the Hawk/Dove game, nations may come to expect that the first possessor of a territory will play Hawk and that others will play Dove. As long as every nation can determine who the first possessor is, the property-like convention will avoid conflict.

Third, we describe why conventions are inevitably imperfect. Ambiguities in the underlying expectations, and in the facts the convention makes relevant, prevent players from coordinating in every situation. For example, a first possession convention regarding territory will fail to coordinate expectations in cases where there are divergent understandings of what constitutes possession, divergent understandings about possible exceptions to the possession convention, or divergent beliefs about the particular facts that define possession. Uncoordinated expectations will lead to conflict, as two nations play Hawk expecting the other to play Dove.

Finally, we explain how a third party's expression can resolve ambiguity, in the convention or the facts, and thereby influence behavior of players in a coordination game. We do not place any reliance on the nations' ideological commitments, such as a perceived...