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Legalization and dispute settlement benefits: The case of the GATT/WTO

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  • Hyo Won Lee

    (Yonsei University)

Abstract

This study investigates how the legalization of the GATT into the WTO affects the distribution of its dispute settlement benefits between developed and developing countries. Existing studies present two arguments to this question — the capacity argument emphasizing the importance of economic capacity for the use of the dispute settlement mechanism (DSM) and the legalization argument suggesting its participatory effects for developing countries. Statistical data about the use of the DSM under the GATT and the early WTO provide some support for the capacity argument, while those under the WTO of its whole period for the legalization argument. However, the capacity theory fails to explain the use of the DSM by developed and developing countries after about the year, 2000, while the legalization theory has so far lacked an adequate empirical support. The purpose of this study is to find out why the capacity theory fails to do so, and to provide more empirical support for the legalization theory. It finds that the respective impacts of economic capacity and socialization experiences on the use of the DSM under the GATT/WTO vary depending on the degree of its legalization: that is, under the less legalized GATT a member country’s economic capacity is important, while under the legalized WTO its previous experiences are so, for its use of the DSM. The legalization has definitely attenuated the impact of its economic capacity on the use of the DSM, while it has strengthened the impact of its previous experiences on it very positively in the first half period of the WTO, and positively in its second half period. These results may mean that the WTO has by now leveled the playing field of dispute settlement not only for its economically less capable members but also for its relatively less experienced ones.

Suggested Citation

  • Hyo Won Lee, 2019. "Legalization and dispute settlement benefits: The case of the GATT/WTO," The Review of International Organizations, Springer, vol. 14(3), pages 479-509, September.
    • Handle: RePEc:spr:revint:v:14:y:2019:i:3:d:10.1007_s11558-018-9313-8
    DOI: 10.1007/s11558-018-9313-8
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    References listed on IDEAS

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