Impure Public Goods, Relative Gains, and International Cooperation

The characterization of the products of international cooperation as public goods has been severely challenged, undermining a central pillar of theories of international cooperation. I review the criticism of public goods assumptions, identifying the need to account for both exclusion and rival consumption in international cooperative arrangements. Drawing on the recent debate of states as relative versus absolute gains maximizers, I offer a characterization of international cooperative arrangements as discriminatory clubs. I develop a refined relative gains model, which focuses on relative net gains, and apply it to a hypothetical situation to illustrate its usefulness in predicting patterns of exclusion and distribution in international trade.