Abstract

How can one understand the problems of collaboration and coordination in the global political economy (GPE)? In situations of global interdependence, individual action by states often does not yield the desired result. Many argue that the solution to the problem of interdependence is to create international institutions. Yet this approach itself raises the issue of how states might go about creating such institutions in the first place. This work examines the conditions under which states might wish to cooperate and provides an introduction to game theory as an approach to understanding interdependent decision-making. It then discusses the conditions under which international institutions are likely to be developed and how they may facilitate international cooperation. Finally, the work examines dimensions of institutional variation, with a discussion of factors that shape the design of international institutions.