ABSTRACT
First order, or domestic, co-ordination frequently implies negative co-ordination, a term coined by F. W. Scharpf to describe conflict avoidance rather than consensus formation in national policy-making. Second order co-ordination refers to the increasing number of multiple and functionally overlapping negotiation systems which are usually examined under the heading of regime analysis, but which are better and more comprehensively characterised as belonging to the domain of international institutions. Welfare enhancing results are possible, as long as negotiations are allowed for and compensation payments made possible. The chapter examines three design perspectives on institutions, in order to assess their relevance in dealing with problems of second and third order co-ordination. In analysis given by G. Tsebelis ‘institutional design refers to choice of rules as opposed to the choice of strategies inside existing rules’. Yet in defining institutions as constraints, Tsebelis adheres to the notion of ‘ideal design’ thus providing the same justification for his argument as do the others.
