The Value of Making Commitments Externally: Evidence from WTO Accessions

49 Pages Posted: 29 Dec 2008 Last revised: 7 May 2021

See all articles by Man-Keung Tang

Man-Keung Tang

International Monetary Fund (IMF)

Shang-Jin Wei

Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

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Date Written: December 2008

Abstract

This paper studies the value of external commitment to policy reforms in the case of WTO/GATT accessions. The accessions often entail reforms that go beyond narrowly defined trade liberalization, and have to overcome fierce resistance in the acceding countries, as reflected in protracted negotiations. We study the growth and investment consequences of WTO/GATT accessions, with attention to a possible selection bias. We find that the accessions tend to raise income , but only for those countries that were subject to rigorous accession procedures. Policy commitments associated with the accessions were helpful, especially for countries with poor governance.

Suggested Citation

Tang, Man-Keung and Wei, Shang-Jin, The Value of Making Commitments Externally: Evidence from WTO Accessions (December 2008). NBER Working Paper No. w14582, Available at SSRN: https://ssrn.com/abstract=1320828

Man-Keung Tang

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Shang-Jin Wei (Contact Author)

Columbia Business School - Finance and Economics ( email )

3022 Broadway
New York, NY 10027
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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