Courts as Coordinators

Why do states build international courts, submit cases, and enforce court judgments? This article examines the role of a court that is neither a “decider†nor an “information provider.†Litigation is costly and does not reveal private information. The court’s ruling is not binding and bargaining can occur before and after the court has ruled. Nevertheless, an alternative dispute resolution mechanism emerges: court rulings can coordinate endogenous multilateral enforcement. Disinterested states will enforce to ensure that they can profitably use the court in the future. Accepting jurisdiction of the court allows a state to make efficiency-enhancing “trades,†winning high-value disputes in exchange for losing low-value disputes. This is possible because litigation is a screening device: states only sue when they derive relatively high value from the disputed asset. The use of the court as a coordination device for multilateral enforcement allows for the existence of a court with endogenous enforcement and jurisdiction.