reelected, satisfying powerful domestic interest groups, or achieving non-economic goals. In this context, the uncoordinated pursuit of what is “nationally appropriate” in a political-economy sense may lead to outcomes that could be improved upon by interstate cooperation. Second, there are many instances in which national governments may not fully internalize the negative (and positive) externalities created by their own policies. These two factors are indeed the justification for virtually all international organizations. They can be combined in the following argument: the uncoordinated pursuit of national policies, determined in political-economy equilibrium, can create negative externalities for other nations, and thus can lead to a collectively inferior outcome.