The success of a policy can depend on the state of nature, which is common to several
decision makers. Any one decision maker may therefore learn about the likely
consequence of a policy by looking at the behavior of other decision makers. This paper
views international treaties as a way for a minister in one country to learn about the
beliefs held by a minister in another country, so allowing each to make better decisions.
A particular application is to International Environmental Agreements. A country which
is unsure about the benefits of environmental policy may believe that the benefits are
higher the greater the number of other countries which lean towards taking action.
Whereas each country may individually take weak environmental action, in equilibrium
several countries may take strong action if they expect others to. A treaty can thus be
self-enforcing. Such effects can appear even if international environmental spillovers are
absent, and even if monitoring and enforcement are infeasible. Our approach can explain
additional phenomena: why lags may appear between the signing of an agreement and its
implementation, and how requirements for approval by several bodies within a country
can increase support for environmental action.
Keywords: Environmental policy, international agreements, signaling, regulation