The Dispute Settlement Mechanism of the WTO: A Brief History and an Evaluation from Economic, Contractarian and Legal Perspectives

36 Pages Posted: 26 Jun 2007

See all articles by T. N. Srinivasan

T. N. Srinivasan

Yale University - Economic Growth Center; Stanford Center for International Development (SCID) - Stanford Institute for Economic Policy Research (SIEPR)

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Abstract

Any rule-based system has to include a mechanism for the enforcement of its rules and a means for settlement of disputes about alleged violation of rules. The General Agreement on Tariffs and Trade (GATT), concluded in 1947, and its successor the World Trade Organisation (WTO) that subsumed it in 1995, embody rules governing the global trading system as specified in various agreements that their members have entered into over time. Naturally, both had a dispute settlement mechanism (DSM). It was a primarily political one in the GATT and was transformed into a largely legalistic one in the multilateral agreement that established the WTO. This paper reviews the history and evaluation of the two DSMs and examines their efficiency based on appropriate criteria. It views them from three alternative and overlapping perspectives: political-diplomatic, legal-economic and social. It concludes with a discussion of the unresolved problems in the operation of the WTO's DSM and the prospects of resolving them in the ongoing Doha Round of multilateral trade negotiations.

Suggested Citation

Srinivasan, T. N., The Dispute Settlement Mechanism of the WTO: A Brief History and an Evaluation from Economic, Contractarian and Legal Perspectives. The World Economy, Vol. 30, No. 7, pp. 1033-1068, July 2007. Available at SSRN: https://ssrn.com/abstract=995311 or http://dx.doi.org/10.1111/j.1467-9701.2007.01011.x

T. N. Srinivasan (Contact Author)

Yale University - Economic Growth Center ( email )

Box 208269
New Haven, CT 06520-8269
United States
203-432-3630 (Phone)
203-432-3635 (Fax)

Stanford Center for International Development (SCID) - Stanford Institute for Economic Policy Research (SIEPR)

Stanford, CA 94305
United States

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