estricted to issues that admit of a simple solution that can be sustained through small numbers strategic interaction Formal modeling bearing on these issues is in its infancy. Fon and Parisi (2004) offer a simple model of custom formation that supports the intuition that customary law is more useful when the preferences of states are relatively more homogeneous. They also consider the role of what they term the " persistent objector'and"subsequent objector"doctrines that allow states to obtain an exemption from customary rules C The Economics of Treaties and Other International Agreements Virtually all of the economic writing on treaties focuses on particular subject areas, with the notable exceptions of Goldsmith Posner(2004)and Guzman(2002) cited earlier. In this section i draw to a limited extent on those two sources but also ideas developed in more specialized contexts to suggest some general points about the economics of treaties In contrast to customary international law, which can emerge through convergence of practice without much communication across states, treaties al ways involve direct communication, negotiation, and the embodiment of the results in a document. This process is costly, and the reasons for the creation of treaties are narrower or at least different from the reasons given earlier for convergence of state practice custom. The coincidence of interest explanation for some customary practices example, cannot explain why states would incur the costs of creating a treaty. The exercise of pure coercion does not require a treaty either, although to be sure a treaty may used to orchestrate an end to coercion. Treaties are likely to be valuable instead when state action creates externalities for other states, and when purely decentralized cooperation without formal communication is inadequate to address them(although a few treaties may have other functions, as discussed in later sections) The mere fact that cooperation is better orchestrated through a process of direct communication, of course, is not sufficient to justify a treaty. Much communication between states occurs without any resulting agreement, and international agreements can arise in the course of communication that are informal and never rise to the level of a treaty. Goldsmith and Posner thus consider the question of why states resort to legalization"by execu ting a treaty and m ing it"binding"as a matter of nternational law in preference to reliance on less formal, nonbinding agreements. They suggest that the legalization of an agreement may reveal information about a state's commitment to the agreement-in their terms, it shows that the state is"serious"aboutrestricted to issues that admit of a simple solution that can be sustained through small numbers strategic interaction. Formal modeling bearing on these issues is in its infancy. Fon and Parisi (2004) offer a simple model of custom formation that supports the intuition that customary law is more useful when the preferences of states are relatively more homogeneous. They also consider the role of what they term the “persistent objector’ and “subsequent objector” doctrines that allow states to obtain an exemption from customary rules. C. The Economics of Treaties and Other International Agreements Virtually all of the economic writing on treaties focuses on particular subject areas, with the notable exceptions of Goldsmith & Posner (2004) and Guzman (2002) cited earlier. In this section I draw to a limited extent on those two sources, but also on ideas developed in more specialized contexts to suggest some general points about the economics of treaties. In contrast to customary international law, which can emerge through convergence of practice without much communication across states, treaties always involve direct communication, negotiation, and the embodiment of the results in a document. This process is costly, and the reasons for the creation of treaties are narrower or at least different from the reasons given earlier for convergence of state practice on custom. The coincidence of interest explanation for some customary practices, for example, cannot explain why states would incur the costs of creating a treaty. The exercise of pure coercion does not require a treaty either, although to be sure a treaty may be used to orchestrate an end to coercion. Treaties are likely to be valuable instead when state action creates externalities for other states, and when purely decentralized cooperation without formal communication is inadequate to address them (although a few treaties may have other functions, as discussed in later sections). The mere fact that cooperation is better orchestrated through a process of direct communication, of course, is not sufficient to justify a treaty. Much communication between states occurs without any resulting agreement, and international agreements can arise in the course of communication that are informal and never rise to the level of a treaty. Goldsmith and Posner thus consider the question of why states resort to “legalization” by formally executing a treaty and making it “binding” as a matter of international law in preference to reliance on less formal, nonbinding agreements. They suggest that the legalization of an agreement may reveal information about a state’s commitment to the agreement—in their terms, it shows that the state is “serious” about