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International institutions vary widely in terms of key institutional features such as membership, scope, and flexibility. In this 2004 book, Barbara Koremenos, Charles Lipson, and Duncan Snidal argue that this is so because international actors are goal-seeking agents who make specific institutional design choices to solve the particular cooperation problems they face in different issue-areas. Using a Rational Design approach, they explore five features of institutions - membership, scope, centralization, control, and flexibility - and explain their variation in terms of four independent variables that characterize different cooperation problems: distribution, number of actors, enforcement, and uncertainty. The contributors to the volume then evaluate a set of conjectures in specific issue areas ranging from security organizations to trade structures to rules of war to international aviation. Alexander Wendt appraises the entire Rational Design model of evaluating international organizations and the authors respond in a conclusion that sets forth both the advantages and disadvantages of such an approach.

The study of international political economy is distinguished not only by its substantive focus but also by its continuing attention to cooperative, or at least rule-guided, arrangements. These cooperative arrangements are defined variously: as an open world economy by Robert Gilpin and Stephen Krasner, and as strong international regimes by Robert Keohane and Joseph Nye. But in either case, the problems of cooperation and order are not approached simply as tactical alliances or as limiting cases of international anarchy. Instead, close attention is paid to the possibilities for rule making and institution building, however fragile and circumscribed they may be. By this view, the absence of a Hobbesian “common power to keep them all in awe” does not preclude the establishment of some effective joint controls over the international environment. Elaborating on this perspective, Brian Barry argues that “international affairs are not a pure anarchy in which nobody has any reason for expecting reciprocal relations to hold up. In economic matters, particularly, there is a good deal of room for stable expectations.”

Cooperation among creditors has been the foundation of international debt arrangement! and is critical to preserving the value of foreign capital. Such cooperation is inherently difficult because every debt rescheduling involves hundreds of banks worldwide, each witr its own financial interests. Nevertheless, large money-center banks have been able to devisi common negotiating positions and conclude rescheduling agreements. Their cooperation i based partly on their extensive daily interactions, which permit both reciprocity and retal iation. In addition, most large banks are permanent fixtures in international capital markets; their ties to other banks and foreign borrowers could be jeopardized if they obstructed a rescheduling. Smaller banks, which lack these international ties, are more apt to hold out from joint arrangements. To secure their agreement, creditor committees (composed of large banks) rely on their domestic ties to these smaller institutions, which is occasionally reinforced by support from central banks.