ABSTRACT
This chapter deals with the activities of international agencies and with the international negotiations among governments. International interdependence through the market cannot justify international organization if the demanders and suppliers of private and public goods are perfectly competitive. The economies of scale that are adduced to justify the activity of international agencies frequently relate to goods that are not public goods. Public choice models assume that, to some extent, politicians and bureaucrats are able and interested to pursue their personal goals, which are not shared by their voters. If national markets become more interdependent or integrated, competition is intensified and the market works more efficiently so that the role of government in the economy can be reduced. The game-theory justification of international organization insists that the number of countries and public suppliers is too small and that some of them are too large to permit workable competition.
