-----

Do states suffer reputational consequences when they exit international organizations (IOs)? And do the effects depend on whether states exit through voluntary withdrawal versus forced suspension? In this presentation Vabulas argues that states likely face negative reputational consequences for both types of IO exit. IOs operate as hand-tying, credible commitment devices, and reneging on international agreements signals that the state may be more likely to back out of other international commitments. Exit stigmatizes the state as being a less credible partner, and actors are thus likely to downgrade an exiting state’s reputation. Vabulas and co-author test these expectations of exit effects on market analysts/investor confidence, using novel data on all exits across 198 states and 534 IOs between 1984 and 2022. Results indicate that both withdrawal and suspension are associated with reputational damage as measured by market analysts’ perceptions of the state’s political risk, though suspension generates more reputational damage than withdrawal. 

-----