Dispute settlement, compliance and domestic politics

Leslie Johns, B. Peter Rosendorff

    Research output: Chapter in Book/Report/Conference proceedingChapter

    Abstract

    Many functionalist models of international cooperation rely on punishment by states to enforce cooperation. However, the empirical record suggests that such state-based accounts offer an incomplete explanation of international trade cooperation. We argue that when theoretical approaches are adjusted to incorporate aspects of domestic politics and institutions, two key insights emerge. First, political pressure from domestic industries can be key in creating demand for violations of trade agreements. Since such pressure is affected by stochastic shocks, the temptation of leaders to commit trade violations can vary over time. The presence of a dispute settlement procedure (DSP) provides flexibility that allows leaders to respond to such pressure by occasionally committing violations and then compensating their trading partners, if the DSP finds that the violation was not subject to exceptions in the trading agreement. This flexibility enhances the willingness of leaders to sign cooperative agreements in the first place. Second, domestic politics can function as an enforcement mechanism for ensuring compliance with international trade agreements and DSP rulings. Voters can condition their electoral decisions on whether their leader complies with socially beneficial trade agreements. The DSP plays an important role in this account as an information-provider. For voters to hold their leaders accountable, they need information about what choices their leader has made and whether his actions constitute compliance with an international agreement. The DSP provides transparency and reduces uncertainty about these factors.

    Original languageEnglish (US)
    Title of host publicationTrade Disputes and the Dispute Settlement Understanding of the WTO
    Subtitle of host publicationAn Interdisciplinary Assessment
    PublisherEmerald Group Publishing Ltd.
    Pages139-163
    Number of pages25
    ISBN (Print)9781848552067
    DOIs
    StatePublished - Jan 1 2009

    Publication series

    NameFrontiers of Economics and Globalization
    Volume6
    ISSN (Print)1574-8715

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    Keywords

    • Barriers to trade
    • Compliance
    • Dispute settlement
    • Domestic politics
    • Punishment
    • Retaliation
    • WTO

    ASJC Scopus subject areas

    • Economics, Econometrics and Finance(all)

    Cite this

    Johns, L., & Rosendorff, B. P. (2009). Dispute settlement, compliance and domestic politics. In Trade Disputes and the Dispute Settlement Understanding of the WTO: An Interdisciplinary Assessment (pp. 139-163). (Frontiers of Economics and Globalization; Vol. 6). Emerald Group Publishing Ltd.. https://doi.org/10.1108/S1574-8715(2009)0000006009