Why do international institutions vary so widely in terms of such key institutional features as membership, scope, and flexibility? We argue that international actors are goal-seeking agents who make specific institutional design choices to solve the particular cooperation problems they face in different issue-areas. In this article we introduce the theoretical framework of the Rational Design project. We identify five important features of institutions—membership, scope, centralization, control, and flexibility—and explain their variation in terms of four independent variables that characterize different cooperation problems: distribution, number of actors, enforcement, and uncertainty. We draw on rational choice theory to develop a series of empirically falsifiable conjectures that explain this institutional variation. The authors of the articles in this special issue of International Organization evaluate the conjectures in specific issue-areas and the overall Rational Design approach.

Informal agreements are the most common form of international cooperation and the least studied. Ranging from simple oral deals to detailed executive agreements, they permit states to conclude profitable bargains without the formality of treaties. They differ from treaties in more than just a procedural sense. Treaties are designed, by long-standing convention, to raise the credibility of promises by staking national reputation on their adherence. Informal agreements have a more ambiguous status and are useful for precisely that reason. They are chosen to avoid formal and visible national pledges, to avoid the political obstacles of ratification, to reach agreements quickly and quietly, and to provide flexibility for subsequent modification or even renunciation. They differ from formal agreements not because their substance is less important (the Cuban missile crisis was solved by informal agreement) but because the underlying promises are less visible and more equivocal. The prevalence of such informal devices thus reveals not only the possibilities of international cooperation but also the practical obstacles and the institutional limits to endogenous enforcement.

The study of international political economy is distinguished not only by its substantive focus but also by its continuing attention to cooperative, or at least rule-guided, arrangements. These cooperative arrangements are defined variously: as an open world economy by Robert Gilpin and Stephen Krasner, and as strong international regimes by Robert Keohane and Joseph Nye. But in either case, the problems of cooperation and order are not approached simply as tactical alliances or as limiting cases of international anarchy. Instead, close attention is paid to the possibilities for rule making and institution building, however fragile and circumscribed they may be. By this view, the absence of a Hobbesian “common power to keep them all in awe” does not preclude the establishment of some effective joint controls over the international environment. Elaborating on this perspective, Brian Barry argues that “international affairs are not a pure anarchy in which nobody has any reason for expecting reciprocal relations to hold up. In economic matters, particularly, there is a good deal of room for stable expectations.”

Regimes can be analyzed both as ‘outcomes to be explained’ and as mediating social institutions that affect international transactions. In the case of postwar trade, the changing outcomes can be predicted simply and with rough accuracy by a hegemonic model. Yet that model cannot explain the continuing reduction of tariffs, the development of new nontariff codes, and the persistence of crucial norms, rules, and institutions. These durable features of modern trade suggest that the logic of regime maintenance is distinct from that of regime initiation. Nor can the hegemonic model account for the regime's highly uneven weakening. The most prominent trade barriers are in mature, basic industries; the least prominent are in industries with differentiated products and extensive research and development expenditures. One explanation (which usefully complements a hegemonic model) is that sectors differ systematically in their capacity to adapt competitively to imports, and hence in their need to preserve their position by trade barriers. Despite the regime's uneven weakening, trade volumes have continued their secular growth. In sectors where the regime remains strong, it has stimulated two-way trade in similar products (intraindustry trade). Where the regime is weaker, new nontariff barriers diminish hypothetical trade growth but rarely aim at a permanent rollback in market shares or trade volume.

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