Publication

This paper studies the concept of an international economic order, namely an institutional arrangement of international rules. According to the author, such rules emerge from negative experiences - historical disasters - that inflict severe hardship on people. He states that a taxonomy for rules reducing transaction costs is developed, for instance through decentralization of decisions, property rights, territoriality and the internalization of border-crossing negative externalities and mechanisms for global public goods. The paper examines some aspects of the rule system, including the process of ceding sovereignty, and philosophical thoughts on international rules.