Behavioural Regularity or Legal Rule?

As a preliminary, we note that with this perturbation, the overall expected stage payoffs for every country are .81⋅1+.09⋅2−.09⋅43+.01⋅1=.88, where the 81. , 09. , 09. , and 01. are the probabilities that the temptation to deviate is T_iJ^t =2 for neither country, only for the country we are looking at, only for the other country, and for both countries, respectively, and where 1, 2 , −43, and 1 are the respective payoffs. Obviously, the pertur-bation has reduced the expected equilibrium stage payoffs. In addition, if all countries always followed the general rule, the stage payoff would al-ways be 1.

It is at this point of the argument that the interference of a social di-lemma with the coordination problem, which Stefan Oeter refers to in his article several times, becomes relevant: If all countries always acted ac-cording to the general rule, all were better off in expectations than if all violate the rule whenever it is beneficial for them in the short run. Even worse, we do not only have this Pareto-superiority of the non-equilibrium strategy combination, but every country is tempted to deviate from the general rule even if some or all others follow it, because violating the rule against a rule follower increases a country’s own expected payoffs from 1 to .9⋅1+.1⋅2=1.1 and violating the rule against a rule violator increases a country’s own payoff from .9⋅1+.1⋅

(

(

)

)

expected payoff from playing the more frequently played action is then .9⋅1−.1⋅4 3= 766

. or .9⋅1+.1⋅2=1.1, depending on its temptation to deviate from the other strategy.

Its payoff from deviating is −.9⋅4 3+.1⋅1=−1.1 if the country’s own temptation is negative and .9⋅2+.1⋅1=1.9 if it is positive. Deviation from the generally played action is thus worthwhile if and only if the country’s temptation to deviate is positive.

6 Expected payoffs from violating against a rule follower are given by the payoff from jointly following the rule when the temptation to violate the rule is negative and the payoff from being the only violator when the temptation is positive. Expected payoffs from following the rule against a violator are given by the payoff from jointly following the rule when the temptation of the other country to violate the rule is negative and by the expected payoff from being the sole follower of the rule when the other country’s

Matrix 4 summarizes these expected payoffs and elucidates that the choice between following the rule as a rule or only when it is opportune exhibits the structure of a Prisoners’ Dilemma.

If not only the author and the reader of these lines but also the involved countries understand that the constantly positive probability of temptations to deviate from the general rule adds a dilemma problem to the cooperation game, then these countries may realize that the general rule of behaviour should be a legal rule, i.e., one whose violation may be punished by retal-iation, possibly in a completely different policy field, without any threat of sanctions against the retaliatory act, although the retaliatory act would oth-erwise be seen as illegal.⁷

As a consequence, we may have both consuetudo and opinio iuris sive necessitates: A behavioural regularity may evolve spontaneously and be-fore countries think about the behaviour being legal or necessary. Of course, such regularity fails to comprise each and every action, as would be the case with an unperturbed coordination game. But this broader un-derstanding of behavioural regularity as a behaviour which countries ex-hibit most often, but not always is exactly what we need for understanding CIL: Only when a regularity is imperfect, we can reasonably ask and an-swer whether the regularity has turned into law, viz. customary internation-al law.

Unfortunately, the last step of the coming about of CIL and of custom-ary law in general still seems to be hardly studies in law and economics, so far. It is still unclear, how and why individuals or countries adopt the opin-ion that a regularity exhibited by a large majority is not only a regularity but required by law. A nice experiment by Engel and Kurschilgen (2013), to which Stefan Oeter refers extensively, elicits that such adoption occurs but does not always occur. However, the process of the adoption proper seems to be still unresearched and would go beyond the scope of a com-ment.

Once opinio iuris sive necessitates has been adopted, the now legal rule will be enforced and stabilized in the same way as most of international law: sanctioning of violations and toleration of these sanctions by third countries. Such enforcement may and probably will be incomplete, but still there would be consuetudo and opinio iuris, so that we can reasonably speak of customary international law.

temptation to violate is positive. Expected payoffs from violation against a violator have been derived at the beginning of this section.

7 Cf. the argument supra at footnote 2 and Norman and Trachtman (2005), 574.

E. Conclusions

Stefan Oeter stresses in his article that one should understand CIL within the framework of evolutionary game theory while taking care of the com-plexities inherent to CIL: repeated interaction, spontaneous evolution of cooperation and a social dilemma in enforcing such cooperation. In this comment, I developed a framework to embrace all these complexities which clearly separates the cooperation game underlying spontaneous evo-lution of cooperation and the social dilemma resulting from randomized temptations to deviate from cooperation. What is still open to further re-search, however, is the adoption of opinio iuris both by early adopters and by imitators.

Bibliography

Engel, C. and M. Kurschilgen (2013), The Coevolution of Behavior and Normative Ex-pectations: An Experiment, American Law and Economics Review, Advance Access published June 21, 2013, doi: 10.1093/aler/aht010.

Norman, G. and J. P. Trachtman (2005), The Customary International Law Game, Amer-ican Journal of International Law, 99 (3) 541–580.

summarized by

José Caiado

The presentation is an attempt to bring economic analysis to the study of international customary law (CIL). It conjectures that CIL deals basically with coordination problems, in which cooperation is only possible if in-formation regarding past behavior is available, and argues that CIL pro-vides for such information, as each actor in the international community can observe and register the behavior of other actors. Important concepts at this point are (i) mutual observation, and (ii) its transformation in expecta-tion of behavior.

These elements lead to reductions in information and decision costs, and fewer securities are needed to invest in cooperation, thereby improving efficiency in international coordination. But still, how does that work?

There is no clear compliance, there is tit for tat retaliation, and there must be something else behind this. One could argue, following Guzman, that reputation fulfills this role. If a state invests in building social capital, you have a trend to avoid actions that affect this social capital represented by reputation. To investigate every past behavior of a state would be absurdly expensive, so the legal rule provides a cheaper tool to represent those pat-terns. As a consequence, CIL facilitates coordination between states. This is the general outset.

Discussions followed on the issue of whether the evolution of CIL should be understood as a result of passive state interaction, or of “premed-itated” action by some states trying to impose a certain law over others. It was argued that states interested in having their idea prevail over others could use two strategies – one is by signing a treaty with a subset of states, like the EU and USA signing an agreement and pragmatically forcing oth-ers to adopt the same standards; the other way is through the use of courts, as states respect courts because they know the courts will reach decisions that are not fully based on CIL; these elements might explain why strong states initially accepted the idea of CIL.

As a conclusion, the author stressed that it is possible to explain CIL as coordination game of long-term interaction. Interaction leads to behavior

regularities that in a certain moment lead to expectations, which then facil-itate transaction by reducing uncertainties about behavior and also lower transaction costs. If states accept these expectations, and communicate to others, CIL might emerge.