Chapter 7 showed that tariff treaties are always politically rational. However, they are not inevitable. Countries sometimes fail to cooperate even when they would gain from it. This suggests that we need a more probabilistic model of cooperation, in which cooperation and noncooperation each occur some of the time. In such a model the main theoretical task is to determine the conditions that make cooperation more or less likely.

To see what makes tariff treaties more or less likely, this chapter examines the stability condition indicating whether or not a given treaty can be enforced. States will not cooperate when the long-term rewards of cooperation are less important than the short-term temptation to cheat. Then I examine the comparative statics of this equation to find the conditions that make states more likely to cooperate. Doing so lets me find out how changing economic conditions or political institutions make cooperation more or less likely.

The most important variable affecting this condition is the average tariff. Intuitively, there are two possibilities. Higher tariffs might make tariff treaties more likely because the gains from such a treaty are greater.