By Katharina Holzinger (auth.)

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Extra resources for Transnational Common Goods: Strategic Constellations, Collective Action Problems, and Multi-level Provision

Example text

Cooperation among nations is most likely if the problem affects the current generation, is well understood, and involves only a small number of neighboring countries. In the case of global problems that are characterized by uncertainty and that affect only future generations negatively, cooperation is least likely. C O M M O N G O O D S T H E O R Y A N D A N A LY T I C A L F R A M E W O R K 27 • As problems differ along a number of dimensions, the need for intervention differs across problems.

So far, not much research has been done on the effects that rules and institutions have on the C O M M O N G O O D S T H E O R Y A N D A N A LY T I C A L F R A M E W O R K 41 incentive structure for common goods. The work of Ostrom, Gardner, and Walker (1994) is a notable exception. Rules, laws, and institutions may change the costs and benefits of the common good, for all or for some of the actors. A certain assignment of property rights provides an important example for a given institutional environment.

This way, they transform the subjective uncertainty of investors into 46 T R A N S N AT I O N A L C O M M O N G O O D S calculable risk (Strulik 2002: 321–325). The service of rating agencies significantly decreases the cost of information for the investors. In doing so, it also decreases the costs of debt for the borrowers, as investors who are not sufficiently informed about the risk of default would demand higher compensation for their risk, and thus higher interest rates would be the consequence.

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