Fair Bargaining; Voluntariness and Reciprocity

London, UK


6.1 Introduction

Given the number of different parties and interests present, deliberation rarely brings about consensus from every member state in COP negotiations. In fact, as I showed in Chap. 2, there are certain situations where there is significant reasonable disagreement over the fair terms of cooperation within this forum. Given that climate change is a problem caused by actors around the world, adequately addressing this problem will depend on finding an adequately acceptable agreement amongst states on a universal scale. Given that the nature of global politics means that states must participate voluntarily, this raises the question of how the UNFCCC can proceed in the face of persistent reasonable disagreement.

There are at least two kinds of response. One approach is to use a voting method to arrive at a mutually acceptable agreement, which I discuss in Chap. 7. A second approach is to bargain, which involves making concessions or compromising on an issue for the sake of reaching agreement.1 Given the difficulty of reaching universal agreement among large numbers of actors, bargaining is seen as critical part of effective decision-making in many multilateral institutions.2

Yet bargaining introduces problems for fairness. For example, when two parties value a negotiated agreement differently, bargaining might result in one actor being exploited. Some suggest that this happened in the preliminary negotiations of the UNFCCC, when many oil producing states put a relatively low valuation on reaching a negotiated agreement on climate mitigation (Depledge 2008). These states were subsequently able to hold out for large concessions from those who valued a negotiated outcome much more. In other cases, people often feel that there are limits to the types of bargains that it’s possible to make in the UNFCCC. Some claim that Russia’s endorsement of the Kyoto Protocol was dependent on its acceptance into the World Trade Organisation (WTO). In this way, a mutually acceptable agreement was reached by ‘linking’ one issue to another. But some linkages, such as those involving side-payments, or those that relate to development aid, are often criticised as unfair (Albin 2001). It’s therefore also necessary to think about what sort of linkages should be permissible in the UNFCCC.

Whilst bargaining is an important part of decision-making, fairness requires some limits on the extent to which parties can pursue their own self-interest in bargaining processes. Recalling the arguments from Chap. 5, fair decisions are those that promote autonomy and independence, allow actors to advance their interests equally, and encourage justification through deliberative procedures. In this chapter, I argue that this has certain implications for fair bargaining. I claim that fair bargains are those that allow people to advance their own interests in a decision, according to some constraints about what’s reasonable. In specific, I argue that fair bargains are those that are (i) voluntary, and (ii) reciprocal. Bargains are voluntary if bargainers are informed and rational, and if bargains are free from coercion and manipulation. Bargains are reciprocal to the extent that they involve roughly equal concessions between bargainers.

Following these claims, I argue that there are several policy measures that can improve the fairness of bargaining in the UNFCCC. Foremost, I argue that there should be limits of the linking of certain issues. Given that many authors argue that issue linkage improves the likelihood of arriving at a mutually acceptable agreement, these conclusions represent an alternative approach to traditional policy recommendations for bargaining.

6.2 Voluntariness

Fair bargains are those that actors agree to voluntarily. That is, fair bargains are those in which actors enter freely and through their own volition. If a bargain is involuntary, then it is clear enough that the bargainers lose some elements of autonomy and independence. Consent is therefore a necessary feature of autonomy (Wertheimer 1989; Zwolinski 2007). But consent isn’t enough for voluntariness. People often think that an arrangement is involuntarily if an actor is forced into an agreement, or if an actor is in no position to reasonably reject it, regardless of consent. To this end, it’s worth spelling out some of the necessary conditions for voluntariness.

People usually think that an agreement is only voluntary if all parties are rational and fully informed about the bargain. This is a necessary, but not sufficient condition for fair voluntariness. For example, Serena Olsaretti argues that voluntary agreements are those in which the parties are fully informed about the terms of an agreement (Olsaretti 2004). This means that parties are aware of what the bargain involves, what is being exchanged, and what the value of the bargain is. People cannot make effective decisions unless they are informed about the decision and they cannot act autonomously unless they know what is at stake. Decision-makers should also be rational, in the sense that they can interpret information and make correct judgements about their interests. These conditions are also true for equality and justification in a decision-making process. Decision-makers can only advance their interests in a decision and justify their decisions to one another if they are aware of the issues at stake and are informed about the decision.

But whilst decision-makers need information about what is being exchanged, this doesn’t extend to information about how much each actor values something. How much an actor values a good is often referred to as an actor’s ‘reservation price’, which reflects the highest cost that an actor is willing to pay for a good. This is a critical feature of bargaining. If I know how much an agent values a good then, then I can demand the agents pays its full reservation price for that good. Procedural justice doesn’t require that decision-makers know what each other’s reservation prices are. House buyers are not obligated to tell estate agents how much they are willing to pay for a house, nor are bidders expected to reveal how much they are willing to pay for a lot in an auction. Hidden reservation prices are compatible with fair procedures, because information about these prices isn’t necessary for voluntary bargains. Voluntariness only requires that each bargainer knows what is being exchanged and is able to make an accurate judgement of his or her own valuation of the good.

But voluntariness also requires a certain degree of rationality. This means that actors bargain under some minimal conditions of rational thought and that they are capable of acting according to their own interests. That is, people are rational if they are able to formulate opinions and advance their interests and views in a bargaining process through negotiation and discussion. This gives us two preliminary conditions for voluntariness: information and rationality. We can, however, go further. Voluntariness also involves being able to act independently of others. This gives us two further conditions, namely: an absence of manipulation, and an absence of coercion, which I discuss in turn below.

6.2.1 Manipulation

A further condition of voluntariness is that an agreement is free from manipulation, if actors are reasonable. There may be some cases where manipulation is justified if actors are unreasonable, but manipulation is unjustified if actors are reasonable. Manipulation, as with coercion and persuasion, is an attempt to influence someone’s behaviour (Rudinow 1978). Where coercion attempts to change behaviour through threats, persuasion does so through the force of better argument. Manipulation, on the other hand, involves changing someone’s behaviour either through deception or by taking advantage of a weakness. The problem with this, as I show below, is that it alters our volition.

There are many different accounts of what manipulation involves and why it is undesirable.3 In general, these accounts share the premise that manipulation involves influencing another actor’s behaviour, although they make different conclusions about how this is done. For Derk Pereboom, manipulation is about controlling an agent’s actions in some way (Pereboom 2001, p. 112). But manipulation isn’t just about controlling someone, in the sense of forcing someone to do something. Rather, for Pereboom, manipulation allows an actor to keep some elements of freedom and independence. For example, if someone manipulates me into joining a club by threatening to reveal something embarrassing about me, then I still have a choice as to whether or not I join. In this respect, event manipulated people maintain some element of independence. Similarly, Robert Kane argues that what is distinct about manipulation is that it influences our behaviour changing our preferences and desires, rather than influencing our actions directly (Kane 1999, p. 64). For Kane, there is at least some sense in which a manipulated person acts according to his or her own free will. With coercion, people act according to the will of another.

But there is more to manipulation than Pereboom and Kane’s accounts. If manipulation just involved influencing behaviour by changing preferences then it would be no different from persuasion. Rather, manipulation alters our preferences through deception, or by taking advantage of a weakness.

Taking deception first, some argue that deception is a necessary feature of manipulation. For Robert Goodin, manipulation necessarily involves misdirection or fraud, because manipulation means that people are unaware that someone is changing their preferences (Goodin 1980, p. 9, 19). If we are aware that someone is trying to manipulate us, then our subsequent actions must come about through our own volition, so people can only be manipulated if they are unaware that it is happening. Of course, manipulation doesn’t necessarily mean that that someone has intentionally misled us. I can manipulate someone if I know that they have an incorrect view but fail to rectify it.4 But on this account manipulation does rely on some element of secrecy or deception.

But there is more to manipulation than just this. There are many situations where people are aware that someone is influencing their behaviour by changing their preferences, yet they are not acting according to their volition. In a series of progressive thought experiments, Joel Rudinow argues that deception isn’t the only method through which manipulation operates (Rudinow 1978). Rather, manipulation also involves changing someone’s behaviour by playing on a supposed weakness that they have. In either case, our behaviour is changed in a way that fails to respect our freedom to act as independent agents. People become objects of someone’s will, even if they do not fully lose their independence. As such, manipulation is problematic for autonomy and it is incompatible with fair bargaining. This gives us three conditions for voluntariness. The first two conditions relate to information and rationality, whilst the third relates to manipulation.

6.2.2 Coercion

Having argued that voluntariness requires three features (information, rationality and lack of manipulation) I now turn to a fourth. In addition to the requirements of bargaining ability and absence of manipulation, voluntariness also requires the absence of coercion. This is because coercion makes us subject to the will of another, thereby removing our ability to act as independent and autonomous agents. Coercion is also problematic for equality and justification in decisions. If someone’s actions are subject to the will of another then they aren’t able to advance their interests in a decision, nor are they able to justify their decisions to one another. Following our discussion from Chap. 4, fair bargains are therefore those that are free from unjustified coercion. I use the term: unjustified coercion because, as I go on to show, there may be some circumstances in which coercion is permissible in fair bargains.

But first it’s necessary to consider what coercion entails. There is a large literature on coercion and it is a concept that is defined in a number of different ways. It’s often thought that coercion involves getting someone to do something that they wouldn’t have otherwise done. But this leaves no distinction between coercion and other forms of influence, such as manipulation and persuasion. As such, most authors argue that coercion involves forcing someone to do something. But there are very different understandings of what this ‘force’ involves.

For Robert Nozick, A coerces B if A communicates a credible threat to B which makes B change his or her actions (Nozick 1974). This means that coercion is based on threats and sanctions, rather than direct force. Coercion is problematic for voluntariness on this account because it removes an actor’s autonomy. But whilst this meets some of our ideas about coercion, it also seems too narrow. Under Nozick’s conception, coercive acts are limited to those that force an actor to do something through a threat. But not all coercive acts involve threats. As I argued in Chap. 4, the fact that an agent has no other reasonable alternatives means that its autonomy can be constrained regardless of whether there is a threat involved. The important point is that something is coercive if it prevents us from making a free choice (Olsaretti 2004, p. 119). This doesn’t just happen if someone threatens us. It also happens if someone forces an agent to take an option, or if people aren’t in a position to reject something. So it’s also necessary to think about cases where there is a direct use of force.

Grant Lamond defines a coercive act as one that meets three conditions: (i) it forces an actor to do something against his or her will, (ii) it subjects the actor to the will of another, and (iii) the coerced actor is unable to do otherwise (Lamond 2000). This third condition is where Lamond’s account diverges from Nozick’s. It is not enough that an actor is threatened; an actor must also be forced to do something. This requires that there are no other reasonable alternatives available to the coerced actor. Coercion is important because it removes free choice; if a reasonable alternative is available, then the actor isn’t forced into an agreement.

A ‘reasonable’ set of alternative options is a sufficient range of options so that an actor can remain autonomous. If an agent’s options are sufficiently limited then they don’t have a choice over whether or not they accept an agreement. Procedural justice means that each actor should be in a position that is sufficiently appealing so that they aren’t forced into accepting an agreement, because they are in a position to reject the proposal. In the bargaining literature, this is sometimes referred to as a Best Alternative To a Negotiated Agreement (BATNA).5 Bargainers with good BATNAs are in strong bargaining positions, whereas those with poor BATNAs are at a disadvantage. Procedural justice requires that bargainers have sufficiently good BATNAs so that they are not forced into accepting agreements. For Olsaretti, a sufficiently acceptable alternative is one that does not require us to give up any of our basic needs (Olsaretti 2004). This is one reasonable position to take on this issue. If people are in a situation in which they are unable to meet their most basic needs, then they are not in position to reject certain bargains, agreements or offers. If people are not in a position to reject something, then they have no choice and they are, in effect, forced into accepting the agreement.

But it’s possible to force a person into a proposal even if they are able to meet their basic needs. I can coerce a wealthy person into accepting an agreement if I threaten to reveal incriminating information to the public about her. The wealthy person is able to meet her basic needs, yet she does not have a sufficient BATNA to reject my offer of blackmail: either she accepts the unfavourable agreement, or she faces defamation. Whilst basic needs provide one way for thinking about whether or not an actor has a suitable range of alternative offers, this is only one limited part of what is important. It’s necessary to provide each actor with sufficient options so that each is in a position to reject an offer. Our concern is that there are some offers that people cannot refuse because they are in a position that is so unfavourable that they literally have no choice but to accept what is put in front of them, however unfavourable that offer actually is. Whilst Olsaretti’s definition of a reasonable alternative option is appropriate to a certain extent, it’s also important to think about when an option is so bad that actors have no choice but to accept a proposal.

I’ve argued that someone can be forced into accepting an offer when his or her alternative to the offer is sufficiently bad that the person has no choice but to accept the offer. I propose that there is no way to answer what a sufficiently bad option is without considering individual cases in their own context. That is, in order to think about whether an actor faces a sufficiently bad alternative range of alternative options, it’s necessary to consider whether that actor is in a position to reject a proposal in individual cases. Olsaretti’s definition of basic needs provides one way of doing this, but there is more at stake than just this. Procedural justice requires that each actor has a sufficient range of alternative options to an agreement, yet the only way to determine this is to think about whether an actor is in a position to reject an agreement in individual cases.

It’s worth pointing out that simply having one option on the table does not mean that people do not have a reasonable BATNA. If someone’s current situation is sufficiently acceptable, then they are not forced into accepting an agreement, even if it is a ‘take it or leave it’ offer. Further, ‘take it or leave it’ offers are acceptable, provided that people are already able to meet their basic needs. It’s also worth pointing out that if an actor has a very poor BATNA, then it does not follow that an actor is coerced in a bargain. If I’m offered a way out of an extremely unfavourable situation, then I hardly have a favourable BATNA. But it seems wrong to claim that I’m coerced on this occasion. What is important about having an insufficient BATNA is that actors are not in a position to reject offers that they would otherwise refuse. But this doesn’t mean that having an insufficient BATNA necessarily implies that someone is coerced if they accept an agreement.

In addition to this account of coercion, some authors also emphasise the role of intention for coercion. For Lamond, it is not enough that a coerced actor is forced into doing something. Rather, if A coerces B, then B must be subject to A’s will. This means that coercion involves deliberately imposing a disadvantage on another actor. For Lamond, the fact that one actor intentionally changes the will of another makes it particularly damaging for autonomy. But intention doesn’t play a critical role here. People can be forced into acting in a certain way even if they are not directly subject to the will of another. Whilst intention may give us additional reasons for worrying about coercion, it is unclear why coercion doesn’t involve acts that restrict our autonomy, even if it’s unintended.

Alan Wertheimer offers an alternative account that avoids this problem by leaving intention aside. Wertheimer suggests that coercive arrangements involve two elements: (i) a choice element, whereby people are unable to exercise their free will, and (ii) a proposal element, whereby agreements take advantage of people (Wertheimer 1989, p. 32). The first element suggests that an act is coercive if an agent is unable to exercise his or her free will. The second element implies that an act is coercive if it takes advantage of someone. For Wertheimer, these are the necessary conditions for coercion. A coerces B if A creates a situation in which B has no choice to accept A’s proposal if A acts wrongly in creating B’s situation. This seems to capture our main concerns about coercion, whilst leaving aside the issue of intention. Coercion is important because of its implications for autonomy. But we are not so concerned with autonomy per se; we are concerned acts that affect our autonomy. The important point here is that coercive acts infringe an actor’s independence and autonomy. In this respect, intention doesn’t play a key role and Wertheimer’s account seems more appropriate for our understanding of coercion.

But contrary to Wertheimer’s account, coercion doesn’t necessarily involve taking unfair advantage of anyone. Whilst situations in which people take unfair advantage on one another are important, this is a matter of exploitation, rather than coercion. As I show in the following section, exploitation is a separate matter, and coercion doesn’t necessarily involve taking unfair advantage of someone. This means that we should accept the ‘choice’ element of Wertheimer’s account, whilst leaving aside his ‘proposal’ element.

This leaves us with two necessary conditions for coercion: (i) there are no reasonable alternatives, and (ii) there is a credible threat or forceful action. Given that fair bargains are free from coercion, one necessary condition for fair bargains is that these conditions are not met simultaneously. Some authors suggest that this means that decision-makers should be substantively equal. The only way to avoid coercion, so the argument goes, is to make sure that actors cannot make use of favourable distributions of power and resources (Knight and Johnson 1997, p. 294). But substantive inequalities don’t necessarily lead to coercive decision-making. Substantive equality is very difficult to achieve in multilateral institutions, and radical resource transfers are likely to be unfeasible in practice. Further, there is no reason for thinking that substantive equality is a necessary part of avoiding coercion. To be sure, substantive equality would remove the possibility of coercion here, but this doesn’t mean that substantive symmetries between actors will lead to coercive decision. Rather, it’s necessary to ensure that these asymmetries do not play a part influencing decisions.

Before moving on, it’s worth considering whether coercion or manipulation are ever justified in fair bargains. As I said earlier, if we’re considering bargaining among reasonable actors, then fair bargains are those that are free from coercion and manipulation. But, although there isn’t sufficient room to give this question the full attention it deserves here, coercion and manipulation do seem justified if we’re dealing with unreasonable actors. Unreasonable actors are those that are irrational, or who make extreme claims and proposals. These actors can hold up decision-making and obstruct agreement. Given the need to reach agreement on climate change, there may be some situations where coercion is justified in the UNFCCC. This might involve forcing unreasonable actors to accept an agreement or adopt more reasonable positions, or forcing uncooperative states to participate in, or comply with agreements. Coercion and manipulation can therefore play important roles in the UNFCCC.

6.3 Reciprocity and Exploitation

Thus far, I’ve argued that fair bargaining requires voluntariness and that this in turn requires sufficient information, rationality, and a lack of unjust manipulation and coercion. But this isn’t all that’s important here. There are some situations in which two parties enter an agreement voluntarily, each benefits, neither is coerced or manipulated, and yet people feel that there is something wrong with the agreement. This happens, for example, when bargainers receive highly disproportionate benefits from the agreement, or if the agreement leaves one party in an extremely disadvantageous position, leading us to think that the agreement is invalid because it is unconscionable in some way. I claim that such arrangements are unfair because they exploit one party. I suggest that fair bargains are those that allow actors to pursue their own self-interest to a limited extent, but that also involve some degree of reciprocity between actors. This is partly because parties should be able to advance their interests equally in a decision-making process.

I show this by drawing from the existing literature on exploitation and reciprocity. Starting with exploitation first, the literature generally suggests that an agreement is exploitative if one actor takes unfair advantage of another. Unfortunately, as many point out, this gives us as many different ideas about exploitation as there are about what fair treatment requires (Arneson 1992, p. 350). Several authors have tried to provide more concrete basis for exploitation, and the remainder of this section considers these claims, arguing that these are insufficient for thinking about exploitation.

6.3.1 Consent and Mutual Advantage

Some, such as David Miller, argue that exploitation depends on some defect in consent (Miller 1987). That is, an actor wouldn’t freely enter into an exploitative agreement, so exploitation must conflict with our requirements of voluntariness set out above. On this account, exploitation only arises if an actor is coerced, or if the bargainers have incomplete information, or if some other condition of voluntariness is absent. If this is the case then it isn’t necessary to consider the problem of exploitation at all. If fair bargains are those that meet the requirements of voluntariness, and if exploitation only arises when these are not met, then we’ve already set the conditions for avoiding exploitation.

But this seems a very limited account of exploitation. Whilst it’s possible to imagine situations in which exploitation arises because an actor is coerced or manipulated, it’s also possible to imagine situations in which people are exploited even if they fully consent to agreements.6 If I forget my umbrella on a particularly rainy day, then I might think that I’m exploited if the only umbrella shop in town raises its prices to take advantage of my misfortune. But it seems strange to suggest that I don’t consent to the agreement if I choose to buy an umbrella. I could brave the rain instead, and I am certainly not forced into the agreement. This suggests that exploitation doesn’t depend on a defect in consent and a broader account of exploitation is needed than one that only focuses on this feature.

Given that I’ve already specified that fair bargains are those that are free from these issues, I’m particularly interested in cases where people feel that something is wrong even when an agreement is consensual. Further, given that actors only voluntarily enter agreements that are mutually beneficial, I’m concerned with consensual, mutually beneficial exploitation. Some authors, such as Joel Feinberg, say that exploitation cannot arise in consensual, mutually beneficial transactions. Feinberg claims that it is wrong to say that one party gains at another’s expense if a transaction is mutually advantageous (compared to a no-transaction baseline), since both parties benefit from the arrangement (Feinberg 1990

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