Negotiating the World Economy

Negotiating the World Economy Review

It is often said economics has become as important as security in international relations. What goes on when government negotiators bargain over trade frictions, exchange rates, debts, and the rules of international economic organizations? Does their behavior have significant effects? Variations in the process of economic negotiation make a substantial difference to the outcomes of international economic issues, John S. Odell says, and the process can be understood and practiced better than it is now.

Odell identifies strategies used by actual negotiators, and explains strategy choice as well as why the same strategy can gain more in some situations and less in others. Focusing on ten major economic negotiations since 1944 that have involved the United States, Odell identifies three broad factors--changing market conditions, negotiator beliefs and biases, and domestic politics--as influences on strategies and outcomes. He depicts economic bargaining as neither purely distributive struggle nor win-win accommodation. He develops a theory premised on bounded rationality, setting it apart from the most common form of rational choice as well as from views that reject rationality. He closes with suggestions for improving negotiation performance today. The main ideas are relevant for any country and for all who may be affected by economic bargaining.