This paper presents a transaction cost-based theory of informal spheres of national influence. It is based on the assumption that sometimes diversity of interests among states, instead of impeding control, creates gains from exchange in terms of controlling different aspects of the international...

According to Principal-Agent theory, states (the principal) delegate the implementation of a legalized agreement to an international organization (the agent). The conventional wisdom about states' capacity to control international organizations is that differences among the member states impede...