April 20, 1998 Economic Analysis of International An Invitation and a caveat effrey L Dunoff Joel P Trachtman"* chard Posner wrote in 1986 that the law and economics movement is perhaps the most important development in legal thought in the last quarter century. 0 Through its application of economic theories and methodologies to legal issues, this movement has revolutionized our understanding of many areas of common law and statutory regulation. Curiously, however, the law and economics revolution has, with few exceptions(see the Appendix), bypassed international law, I perhaps for some of the same reasons that realist political scientists ignore international law, or perhaps because of a concern that economic analysis is somehow less useful in the international context than in the domestic context. The purpose of this paper is to begin an inquiry into the actual and potential application of law and economics to international law With the rejection of both natural law theory and state-centered positivism as sources of Visiting fellow at the woodrow wilson School of International Affairs and Associate Professor of Law, Temple University School of Law Professor of International Law, The Fletcher School of Law and diplomacy Portions of this article were presented at the Harvard Law School Graduate Legal Studies Thesis Writing Workshop, the 1996 Conference of the American Society of International Law International Economic Law Group, the Harvard Law School Research Workshop on the World Trading System w. We are grateful for comments from participants. We are also grateful for nd the george Mason University Conference on the Economic Analysis of Atik, Dan Farber, David Kennedy, David Skeel, Paul Stephan, Al Sykes others], but we retain full responsibility for this paper. Prof. Dunoff's research for this project was supported by a summer research grant awarded by temple University School of Law 0 RICHARD A POSNER, ECONOMIC ANALYSIS OF LAW Xix(1986) But see economic dimensions in international law: comparative and empirical PERSPECTIVES (Jagdeep S. Bhandari alanO Sykes, eds. 1997), and especially the introduction by ronald A CassApril 20, 1998 Economic Analysis of International Law: An Invitation and a Caveat Jeffrey L. Dunoff* Joel P. Trachtman** Introduction Richard Posner wrote in 1986 that the law and economics movement is “perhaps the most important development in legal thought in the last quarter century.”0 Through its application of economic theories and methodologies to legal issues, this movement has revolutionized our understanding of many areas of common law and statutory regulation. Curiously, however, the law and economics revolution has, with few exceptions (see the Appendix), bypassed international law,1 perhaps for some of the same reasons that realist political scientists ignore international law, or perhaps because of a concern that economic analysis is somehow less useful in the international context than in the domestic context. The purpose of this paper is to begin an inquiry into the actual and potential application of law and economics to international law. With the rejection of both natural law theory and state-centered positivism as sources of * Visiting Fellow at the Woodrow Wilson School of International Affairs and Associate Professor of Law, Temple University School of Law. ** Professor of International Law, The Fletcher School of Law and Diplomacy. Portions of this article were presented at the Harvard Law School Graduate Legal Studies Thesis Writing Workshop, the 1996 Conference of the American Society of International Law International Economic Law Group, the Harvard Law School Research Workshop on the World Trading System and the George Mason University Conference on the Economic Analysis of International Law. We are grateful for comments from participants. We are also grateful for guidance on these subjects, and in some cases comments on earlier drafts, from Ken Abbott, Jeff Atik, Dan Farber, David Kennedy, David Skeel, Paul Stephan, Al Sykes [others], but we retain full responsibility for this paper. Prof. Dunoff’s research for this project was supported by a summer research grant awarded by Temple University School of Law. 0 RICHARD A. POSNER, ECONOMIC ANALYSIS OF LAW xix (1986). 1 But see ECONOMIC DIMENSIONS IN INTERNATIONAL LAW: COMPARATIVE AND EMPIRICAL PERSPECTIVES (Jagdeep S. Bhandari & Alan O. Sykes, eds. 1997), and especially the introduction by Ronald A. Cass. 1