International Law and State Behavior: Commitment and Compliance in International Monetary Affairs

TLDR

Very little empirical research systematically investigates why sovereign governments make international legal commitments and how such commitments influence state behavior. The article investigates why sovereign governments make international legal commitments, how these commitments affect state behavior, and examines patterns of commitment and compliance in international monetary law. The study analyzes the signaling role of legal commitments, arguing that reputational concerns drive compliance patterns. The study finds that regional peer behavior, competitive market forces, and reputational motives drive compliance, and that legal commitment positively influences governments that have recently lifted restrictive policies.

Abstract

Why do sovereign governments make international legal commitments, and what effect does international law have on state behavior? Very little empirical research tries to answer these questions in a systematic way. This article examines patterns of commitment to and compliance with international monetary law. I consider the signal governments try to send by committing themselves through international legal commitments, and I argue that reputational concerns explain patterns of compliance. One of the most important findings is that governments commit to and comply with legal obligations if other countries in their region do so. Competitive market forces, rather than overt policy pressure from the International Monetary Fund, are the most likely “enforcement” mechanism. Legal commitment has an extremely positive effect on governments that have recently removed restrictive policies, which indicates a desire to reestablish a reputation for compliance.