The optimal design of international trade institutions: Uncertainty and escape

International institutions differ greatly in their forms; the number of states included, the decision-making mechanisms, the range of issues covered, the degree of centralized control, and the extent of flexibility within them all vary substantially from one institution to the next. What accounts for such variation? In this article, as part of the larger Rational Design project on the design of international institutions, we claim that such variation can be accounted for as part of the rational, selfinterested behavior of states. We show that at least one important aspect of institutional design can be explained as a rational response of states to their environment.