Hostname: page-component-8448b6f56d-gtxcr Total loading time: 0 Render date: 2024-04-24T07:19:38.868Z Has data issue: false hasContentIssue false
  • English
  • Français

Alliances, market power, and postwar trade: explaining the GATT/WTO

Published online by Cambridge University Press:  25 June 2010

JOANNE GOWA
JOANNE GOWA*
Affiliation:
Princeton University, Princeton, NJ
*
*Email: jgowa@princeton.edu
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper argues that testing the empirical implications of existing theories about institutions yields rich insights into the postwar trade regime. Market-failure theory predicts that the GATT/WTO will exert its strongest impact on trade between its largest member states. A theory based on security externalities implies that a sizeable expansion of trade will also occur between a subset of the contracting parties that alliance ties link. An analysis of the data shows that the evidence is consistent with both theories, making clear the value added of taking explicitly into account the economics and politics that motivated the establishment of the postwar regime and that governed its subsequent operation.

Type
Review Article
Information
World Trade Review , Volume 9 , Issue 3 , July 2010 , pp. 487 - 504
Copyright
Copyright © Joanne Gowa 2010

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Bagwell, Kyle (2007), ‘Remedies in the WTO: An Economic Perspective’, Economics Department Discussion Papers, Columbia University.Google Scholar
Bagwell, Kyle and Staiger, Robert W. (2002), The Economics of the World Trading System, Cambridge, MA and London: MIT Press.CrossRefGoogle Scholar
(2006), ‘What Do Trade Negotiators Negotiate About? Evidence from the World Trade Organization’, NBER Working Paper 12727.Google Scholar
Bagwell, Kyle, Mavroidis, Petros C., and Staiger, Robert W. (2002), ‘It's a Question of Market Access’, American Society of International Law, 96(1): 56–76.CrossRefGoogle Scholar
Bown, Chad P. (2004), ‘Developing Countries as Plaintiffs in GATT/WTO Trade Disputes’, The World Economy, 27(1): 59–80.CrossRefGoogle Scholar
Broda, Christian, Limão, Nuno, and Weinstein, David (2008), ‘Optimal Tariffs and Market Power: The Evidence’, American Economic Review, 98(5): 2032–2065.CrossRefGoogle Scholar
Busch, Marc and Reinhardt, Eric (2003), ‘Developing Countries and GATT/WTO Dispute Settlement’, Journal of World Trade, 37(4): 719–735.Google Scholar
Davis, Christina L. and Bermeo, Sarah Blodgett (2009), ‘Who Files? Developing Country Participation in GATT/WTO Adjudication’, Journal of Politics, 71(3): 1033–1049.CrossRefGoogle Scholar
Eicher, Theo S. and Henn, Christian (2009), ‘In Search of WTO Trade Effects: Preferential Trade Agreements Promote Trade Strongly but Unevenly’, IMF Working Paper WP/09/31.CrossRefGoogle Scholar
Felbermayr, Gabriel and Kohler, Wilhelm (2009), ‘WTO Membership and the Extensive Margin of World Trade: New Evidence’, Department of Economics, University of Hohenheim, Germany.Google Scholar
Finger, J. M. (1979), ‘Trade Liberalization: A Public Choice Perspective’, in Amacher, Ryan C., Haberler, Gottfried, and Willett, Thomas D. (eds.), Challenges To a Liberal International Economic Order, Washington, DC: American Enterprise Institute, pp. 421–453.Google Scholar
Goldstein, Judith L., Rivers, Douglas, and Tomz, Michael (2007a), ‘Do We Really Know That the WTO Increases Trade? Comment’, American Economic Review, 97(5): 2005–2018.Google Scholar
(2007b), ‘Institutions in International Relations: Understanding the Effects of the GATT and the WTO on World Trade’, International Organization, 61(1): 37–67.Google Scholar
Gowa, Joanne and Kim, Soo Yeon (2005), ‘An Exclusive Country Club: The Effects of the GATT on Trade, 1950–94’, World Politics, 57(4): 453–478.CrossRefGoogle Scholar
Gowa, Joanne (1994), Allies, Adversaries, and International Trade, Princeton, NJ: Princeton University Press.Google Scholar
Gowa, Joanne and Mansfield, Edward D. (1993), ‘Power Politics and International Trade’, American Political Science Review, 87(2): 408–420.CrossRefGoogle Scholar
Herz, Bernhard and Wagner, Marco (2007), ‘Do the World Trade Organization and the Generalized System of Preferences Foster Bilateral Trade?’, BGPE Discussion Paper No. 20.Google Scholar
Heston, Alan, Summers, Robert, and Aten, Bettina (2006), ‘Penn World Table’, Version 6.2, Center for International Comparisons of Production, Income and Prices at the University of Pennsylvania.Google Scholar
Hoekman, Bernard M. and Kostecki, Michel M. (2001), The Political Economy of the World Trading System, The WTO and Beyond, 2nd edn, Oxford: Oxford University Press.Google Scholar
Irwin, Douglas A., Mavroidis, Petros C., and Sykes, Alan O. (2008), The Genesis of the GATT, New York, NY: Cambridge University Press.CrossRefGoogle Scholar
Keohane, Robert O. (1994), After Hegemony: Cooperation and Discord in the World Political Economy, Princeton, NJ: Princeton University Press.Google Scholar
Ludema, Rodney D. and Mayda, Anna Maria (2009), ‘Do Countries Free Ride on MFN?’, Journal of International Economics, 77: 137–150.CrossRefGoogle Scholar
Mansfield, Edward D. and Bronson, Rachel (1997), ‘Alliances, Preferential Trading Arrangements, and International Trade’, American Political Science Review, 91(1): 94–107.CrossRefGoogle Scholar
Rose, Andrew K. (2004), ‘Do We Really Know That the WTO Increases Trade?’, American Economic Review, 94(1): 98–114.CrossRefGoogle Scholar
Subramanian, Arvind and Wei, Shang-Jin (2007), ‘The WTO Promotes Trade, Strongly but Unevenly’, Journal of International Economics, 72(1): 151–175.CrossRefGoogle Scholar
Trebilcock, Michael J. and Howse, R. (1999), The Regulation of International Trade, London and New York: Routledge.Google Scholar
US Tariff Commission (1965), Operation of the Trade Agreements Program, v. 15 1962/63, Washington, DC: GPO.Google Scholar
Wilkinson, Rorden and Scott, James (2008), ‘Developing Country Participation in the GATT: A Reassessment’, World Trade Review, 7(3): 473–510.CrossRefGoogle Scholar
Winham, Gilbert (1986), International Trade and the Tokyo Round Negotiation, Princeton, NJ: Princeton University Press.Google Scholar