by Joel P. Trachtman. Harvard University Press, Cambridge, MA and London, UK, 2008. 368pp. Hardcover. $55.00/£40.95/€49.50. ISBN: 9780674030985.

Reviewed by Dr. Sideek M. Seyad, Faculty of Law, Stockholm University, Sweden. Email: sideek.mohamed [at]


There are several academic publications on the application of the theory of law and economics in various branches of legal science, but it is quite rare and far apart to come across on a work dedicated to an economic analysis of the structure of the international legal system. This book, by professor Joel P. Trachtman, is therefore a valuable and timely contribution that fills a gap in this sphere of the legal science.

As acknowledged by the author, it is largely a compilation of articles he had previously published in a variety of law journals. The reproduction of an already published set of articles does not necessarily devalue the usefulness and quality of this book. On the contrary, by investing more time and intellectual energy, Trachtman has presented his thoughts in a more refined and qualitative manner in this book. He aptly describes his book as “an attempt to consolidate, integrate, rectify and extend” his thoughts.

This is certainly an outstanding piece of academic work, examining the complex structure of the international legal system from a law and economic perspective, both in depth and width. In the process of illuminating and highlighting the theory of law and economics of international law, Trachtman skillfully highlights and clearly and critically addresses a mixture of issues which are peculiar to international law. Some of the topics covered relate to treaty-making and jurisdiction, the rise, stability, and efficiency of custom, the establishment of international organizations, and the structure and role of international legal dispute settlement.

The allocation of legal power to States lies at the core of the book. Trachtman’s aim is not to focus on substantive international law issues, such as international environmental law, which in recent times has drawn enormous global attention, but his primary goal is to provide a comprehensive and tangible framework to ascertain and evaluate the formation and application of law in areas such as international environmental law, international trade law and international human rights law.

The issue of jurisdiction in the economic analysis of international law finds a prominent place throughout this book. Trachtman rightly points out that at the core of analysis of international law as a system is the question of jurisdiction. In the field of legal science, a clear understanding of the concept of jurisdiction is thus vitally essential for a variety of purposes such as prescription, adjudication, enforcement, and so on. Jurisdiction is an expression often used by lawyers to determine the nature and scope of allocation of authority. In [*70] layman language, the concept of jurisdiction refers to the manifestation of power or authority.

Trachtman forcefully asserts that even issues of cooperation, very often at the heart of international relations, are nothing more than a subset of the problem of allocation of authority or jurisdiction. He therefore begins with a study of jurisdiction as power and then follows its transfer through custom and treaty, thereafter examining the way States share it through organizations. Through the skillful application of this technique, Trachtman seeks to convince the reader that jurisdiction is the core issue in all of international law.

In further expanding on the issue of jurisdiction, the author declares that the assets traded in the international “market” are not goods or services per se, but assets peculiar to States, namely components of power or jurisdiction. Trachtman further declares that in international society, the equivalent of the market is simply the place where States interact to cooperate on particular issues to trade in power to maximize their preferences. Some of the potential sources of gains from exchange are clearly identified and explained in this work.

In the first two chapters Trachtman skillfully explains why States enter into transactions to form rules of jurisdiction and how such rules are formed and changed. He explains how transactions in jurisdiction take place and refers to customs, treaties and organizations as tools of States to engage in transactions in jurisdiction. Such tools are further developed in the following chapters dealing with allocation of jurisdiction, customary international law, treaties, international organizations and adjudication.

Chapter Three is devoted to ascertaining, by means of an economic analysis, why customary international law binds States. In this context, Trachtman develops a series of hypotheses to show why States tend to comply with customary international law. In situations where States fail to reach an agreement, he claims such a course of action as inefficient. According to his assessment, payoffs resulting from cooperation, such as transactions in jurisdiction, are greater than the payoffs from mutual defections. A similar line of hypotheses is drawn in terms of efficiency and asymmetry.

Chapter Four deals with creating Treaty rules in order to reallocate jurisdiction. They form one of the important sources of international law. Unlike customs, Treaties do not require proof of practice to be accepted as a legal source. They are established to trade in jurisdiction, and the European Union (EU) is a classic example in this context. It is through the medium of a series of international treaties that the allocation and reallocation of jurisdiction between the institutions and Member States of the EU are defined and established. Trachtman, by using the economic analysis theory, examines why Treaties are binding and he reviews the role of efficient breach in the Treaty. In the latter context, Trachtman explains that where the price of a breach is high, compliance will result.

An economic analysis of the role and functioning of international organizations is presented in Chapter Five. This chapter explains why States [*71] belonging to such organizations agree to share jurisdiction. Trachtman specifically pinpoints international organizations, such as the United Nations, World Trade Organization, North Atlantic Free Trade Agreement, EU, and the like, and examines to what extent and how they are designed to discipline the activities of States. He also explains what kinds of legislative authority should reside with these organizations and whether judges should be permitted to strike down national regulatory measures which are supported by reference to the developments in the EU, in particular the Single European Act 1986 and the GATT-WTO.

The conflicts among functional organizations are clearly presented in Chapter Six. In the process of globalization, the territorial limits of States have enormously diminished, and they are increasingly linked inter-functionally in areas such as trade, environment, health, security, finance, and so on.Trachtman suggests that the rules on free trade, for example, cannot operate in a vacuum. They cannot be completely detached from related issues, such as the environment, health or security. Such linkages are subjects of international law where the States try to secure the best concessions by resorting to different transactional forms. There are some interesting examples provided in this book, such as trade and non-trade issues which Trachtman further expands upon, linking trade and human rights in relations between the USA and Burma. An economic analysis to weigh the costs and benefits of such inter-functional linkages is clearly and efficiently highlighted in this chapter.

The last chapter deals with the role of adjudication in international allocation of authority. In the context of international law, the issue of adjudication could arise in a variety of situations, such as between States, between States and citizens, States and international organizations, international organizations and international organizations, and so on. Trachtman also examines the delegation of authority to judges and different kinds of roles they play in the process of dispute resolution.

Trachtman also offers a number of passing remarks that provoke further comment. He refers, for example, to the principle of subsidiarity in the process of economic analysis of international law. This is a well known doctrine to scholars who are familiar with EU Law. This doctrine found its way into the EU through the Maastricht Treaty in 1993 and was further entrenched by the Lisbon Treaty in December 2009. The aim of this principle is to delimit the area of jurisdiction between the institutions of the EU and its respective Member States.

Trachtman appears to portray the EU as purely a catholic society. He further claims that the subsidiarity principle is a product of Catholicism. These controversial and unqualified views need to be further qualified. It must be noted first and foremost that EU of twenty seven Member States is not a homogenous catholic society. Turkey, which is predominantly an Islamic State, is at the door step seeking full membership. Nor is the principle of subsidiarity something peculiar and entrenched only in catholic societies. The principle of subsidiarity is also a concept found and practiced from time [*72] immemorial in many other parts of the world, such as Sri Lanka and India, which also have a distinct and prominent catholic population but are predominantly Buddhist/Hindu societies.

In order to rebut the claim that EU is a pure catholic entity, it is useful to refer to two recent and significant developments in the EU. The euro was introduced in 1999 as the single currency, even though some Member States remain outside this monetary zone. There was much debate on the designing of the new currency, and the proposal from certain Member States to super-impose a picture of the holy Pope in the euro bank notes was shot down by some other Member States. At the time of negotiating the Lisbon Treaty, a small group of Member States suggested making specific reference in the Treaty to Catholicism, but this proposal was dropped as some Member States opposed it. The failure to reach a consensus in both these issues may rebut the assumption that EU is purely a catholic society. In countries like Sri Lanka and United Kingdom, the image of the President and the Queen are often depicted in their respective banknotes, and particularly in the constitution of Sri Lanka there is special reference to Buddhism, requiring the State to promote and protect it. If the EU is predominantly a catholic society, there would not have been any difference of opinion among the Member States to depict the image of the holy Pope in the euro banknotes and to make reference to Catholicism in the Lisbon Treaty as the religion of the EU.

Despite such trivial misgivings, there is no doubt this book is an invaluable and timely contribution to fill a gap existing in the literature on law and economics. I could without any hesitation recommend THE ECONOMIC STRUCTURE OF INTERNATIONAL LAW as an essential purchase to legal scholars and academics interested in application of law and economic analysis to this branch of the law. It will also be an excellent library addition to support any graduate or post-graduate courses specializing in the study of the economic analysis of international law.

© Copyright 2010 by the author, Sideek M. Seyad.