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What is the meaning of Pareto inefficient outcomes
Policy coordination is, therefore, designed to avoid Pareto inefficient outcomes. In absence of a supranational authority that can enforce agreements made between sovereign nations the appropriate tool for analysing economic policy coordination is non-cooperative game theory. From this perspective each country will only agree to policy coordination if it perceives this is in its own self-interest. As a result all agreements become self-enforcing.
State article 2 of International law Article 2 states that there is no right of a State under international law to diplomatic relations; these exist by mutual consent. However
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