ABSTRACT
In the economic literature, there are generally several kinds of responses that have been suggested—ways that governments can intervene. Regarding the first question and its relation to market failure, the most familiar and the most commonly reiterated in the economics literature are the problems of monopoly; the problems of asymmetry of information; and the problems of government distortions, for a variety of reasons. This chapter discusses the policy and economics of international regulation in the context of some of the traditional, almost doctrinal, economics learning about regulation relating to government intervention in the market. Checks on power, or checks and balances, are necessary to keep the international system from misusing its power. National constitutions and how they work are necessary to interface the international system with the domestic system. This is a potential check. The question of selecting the officers of the international system will be a check on power.
