THE LIMITS OF COLLECTIVE ACTION: A COLLECTIVE GOODS INTERPRETATION OF ENERGY COOPERATION AMONG WESTERN INDUSTRIALIZED COUNTRIES IN THE INTERNATIONAL ENERGY AGENCY

This is a study of the industrialized countries and their attempt to coordinate energy policies through a newly established intergovernmental organization, the International Energy Agency (IEA). The goal of the study is to evaluate the strategies and performance of the IEA in orchestrating responses to the energy dilemma and to suggest conditions for future success and failure. The objective of the analysis is to clarify the context of choice within which future international energy planning will take place.; A review of international energy relations reveals multiple transitions in the world political and energy environments which in turn suggest the necessity of institutional management of international energy relations and policies. The environment of the IEA, however, is characterized by a complex array of political and economic forces that are likely to make policy coordination difficult. After sketching the institutional emergence and the organizational arrangements of the IEA, the study focuses on two objectives of the organization: oil supply security during an emergency and reduced dependence on imported oil. These objectives are analyzed in terms of an economic theory of alliances which draws upon collective good principles. The theory predicts that in any alliance, there is a systematic tendency of large countries within a given alliance to bear a disproportionate burden in the supply of alliance goods while the smaller countries take a free ride in its provision.; The study conducts three tests of hypotheses. In the first, the largeness of the IEA countries is measured by Gross Domestic Product (GDP) and the disproportionate burden is measured by the percentage of dollar equivalents in oil stocks to GDP. In the second, the largeness of each IEA country is measured by oil consumption and the disproportionate burden is measured by the percentage of oil stocks to oil consumption. In the third, the largeness of the IEA countries is measured by GDP and the disproportionate burden is measured by the percentage of government expenditures in energy research and development to GDP. In each test, countries are ranked in the two selected variables and the Spearman rank correlation coefficient was used to provide a measure of the strength and direction of the relationships. In addition to these hypotheses, an alternative measure of alliance valuation--oil import dependence--was tested in five cases.; In the case of IEA, this study found that the collective good dynamic was not operative in the oil supply security objective (because strong formal commitments by each member have overcome the free-riding dilemma) but several unanswered questions remain in this area that make it prudent to plan additional institutional arrangements. The public good dynamic was found to be operative in the long-term objective of reduced dependence on imported oil which suggests a number of potential problems areas. Given these findings, the study suggests that the members of the IEA need to make firmer commitments to the organization. To do so several policy considerations are offered, all of which are designed to extract commitments from each member or to create incentives that would ultimately lead to the provisions of the alliance good. Finally, it was found that oil import dependence as a measure of alliance valuation is a dubious indicator of how countries are willing to commit themselves to the alliance. It does suggest, however, that countries more dependent on oil in relation to their overall energy consumption do value the IEA alliance more than those countries that are less dependent.