An eective legal system not only solves specic disputes but also inhibits future violations. This paper examines how the WTO dispute settlment process resolves specic disputes and reduces their future occurrence. First, the process of selecting cases to escalate in the legal venue reveals information about the preferences of defendant and complainant. A third party arbitrator and multilateral membership adds international obligation and reputation as new leverage for compliance. Second, a formal dispute mechanism may have broader impact if the adjudication of one case leads to other countries reforming policies. Each dispute case claries interpretation of the law and enhances the credibility of enforcement.
This paper examines WTO dispute settlement to assess the role of courts to solve disputes and prevent future incidents. The eectiveness of WTO dispute settlement to resolve disputes is tested with statistical analysis of an original dataset of potential trade disputes coded from U.S. government reports on foreign trade barriers. Evidence shows that taking a dispute to the legal forum brings policy change in comparison with outcomes achieved in bilateral negotiations. In addition, past WTO disputes shape the subsequent pattern of trade barriers. Looking more broadly, the declining frequency of complaints led by all members from 1995 to 2015 is consistent with the deterrence argument. While some areas of law encounter repeat litigation, standards and new agreements have shown more resilient enforcement. Furthermore, analysis of the ling patterns from 1975 to 2012 suggests that the increase of legalization in the WTO has established deterrence eects that were absent in the GATT period. Looking more closely at individual cases, the paper evaluates how past complaints serve to clarify the law and increase the credibility of enforcement.
Conditional membership may be one of the most important sources of leverage for IOs. What underlies the terms of selection and the willingness of applicants to pay the price of entry? The influence of accession conditions has been studied in the context of EU and NATO, where sizable benefits motivate major concessions by applicants. This paper examines a much less powerful organization, the OECD. The organization provides both public goods in the form of policy information and club goods in the form of status. Through a process of self-selection by applicants and screening by members, the organization has managed gradual expansion while preserving its value as an elite club of like-minded states. Informality of accession criteria has allowed flexibility to raise and lower the bar for entry. Statistical analysis highlights broad conditions related to income, democracy, and geopolitics that correlate with earlier entry into the OECD relative to other countries while there are less clear patterns for the role of trade and financial openness. Case studies of Japan, Mexico, Korea, and the Czech Republic are used to examine how prospective OECD membership motivated reforms in regulatory policies and trade. These countries sought to benefit from the status of association with the advanced industrial democracies. On the basis of shared liberal orientation and geopolitical alignment, these outsiders were accepted into the club. At the same time, a case study of Brazil highlights how its refusal to seek OECD membership reflects a political preference to remain distant from the advanced industrial nations even as its economy and policies are more integrated with these states.
Multilateral institutions manage interdependence among states as they seek mutual gains from cooperation. But access to institutions is closely guarded by states, which exploit membership discrimination to exclude rivals and confer benefits to favored partners. We argue that bargaining over accession facilitates linkages between security interests and other issue areas regulated by institutions. Our argument departs from the functional expectation that states choose partners who offer the greatest gains from policy adjustment, and instead highlights the role of geopolitical alignment. Analyzing membership patterns for 89 multilateral economic organizations, we find that security ties shape which states join and remain in organizations. We use a finite mixture model to examine the relative importance of economic and security considerations, finding that geopolitical alignment accounts for about half of the membership decisions in economic institutions. The geopolitical origins of IGO membership represent a new mechanism connecting the security and economic behavior of states.