| ID | 120880 |
| Title Proper | Market-protecting institutions and the World Trade Organization's ability to promote trade |
| Language | ENG |
| Author | Johnson, Jesse C ; Souva, Mark ; Smith, Dale L |
| Publication | 2013. |
| Summary / Abstract (Note) | Recent research has shown that the General Agreement on Tariffs and Trade (GATT)/World Trade Organization (WTO), contrary to common perceptions, does not increase trade. We argue that the effect of the GATT/WTO on dyadic trade flows is conditioned by the strength of market-protecting institutions (MPIs), which are the fundamental determinant of transaction costs. Dyads with weak MPIs do not see an increase in trade from GATT/WTO membership while dyads that have strong MPIs do see an increase in trade from GATT/WTO membership. In the former case, the benefits of GATT/WTO membership are outweighed by the high risk of doing business under weak market protection, but when property rights are well protected, GATT/WTO membership contributes positively to international trade. Empirical analysis of bilateral trade flows from 1948 to 1999 supports this hypothesis. |
| `In' analytical Note | International Studies Quarterly Vol. 57, No.2; Jun 2013: p.410-417 |
| Journal Source | International Studies Quarterly Vol. 57, No.2; Jun 2013: p.410-417 |
| Key Words | General Agreement on Tariffs and Trade (GATT) ; World Trade Organization (WTO) ; Market - Protecting Institutions (MPIs) ; Property Rights |