Where to Pick From? International Bargaining over Policy Diffusion

The idea that international treaties are individually crafted and distinct is passé. Instead, a growing literature demonstrates that countries adopt text segments from other existing treaties. Although diffusion is central to the explanation of similarities and differences across international treaties, we know little about when and why a group of countries agrees to copy from foreign treaties and when they decide against doing so. Moreover, scholarly work is largely silent as to where the foreign text comes from: Are rules mostly transferred from own past agreements to own new agreements; or are rules adopted from foreign past agreements to own new ones? What factors systematically mediate between these alternative outcomes? In this paper, we propose a formal model of international bargaining in which parties individually prefer to strike an agreement that is similar to their own past commitments in terms of institutional design. In short, they like to copy-paste from treaties they have signed in the past. Yet, in some situations, the (Nash) bargain solution excludes such an outcome in favour of the adoption of a compromise foreign text. The model predicts that (i) symmetry in bargaining power; and (ii) large discrepancies in terms of bargaining positions between the parties at the negotiating table decrease the likelihood of an agreement based on the own treaty design of a given party. An agreement from outside their own designs is not preferred by any party, but is still superior to investing in creating original rules or to not striking an agreement. We test these propositions with a combination of quantitative text and temporal inferential network analysis. Using text-data from preferential trade agreements and bilateral investment treaties signed between 1945 and 2018, we find that parties indeed prefer to copy-paste their own past designs. However, power-symmetry as well as differences in bargaining positions decrease the likelihood of the recycling of own old treaty texts and makes the negotiating parties more prone to choosing an institutional design outside of their own treaty templates. The paper demonstrates the complexities of institutional design adoption in the international context and shows that bargaining dynamics critically determine the text-source in this diffusion process.