The WTO and Economic Development

Ben Zissimos (University of Exeter Business School)

My new edited volume tilted The WTO and Economic Development, brings together a collection of perspectives on different aspects of the purpose and institutional design of the World Trade Organization (WTO), and how these relate to economic development.[1]  The perspectives are contributed by a group of leading scholars in the economics of international trade.  The role that the WTO and its progenitor, the General Agreement on Tariffs and Trade (GATT), have played to date in facilitating economic development, and the role that the WTO can reasonably be expected to play in the future, is the unifying theme.

The following summary is based on my introductory chapter, which presents a synthetic literature review to develop context for the contributions that follow and draws basic insights.

Chapter 1, by Robert Staiger, sets out a comprehensive framework for formally incorporating non-tariff measures (NTMs) into a model for analyzing a multilateral trade agreement, taking tariffs into account as well.  The chapter notes that while developing countries tend to impose border NTMs on imports from developed countries, developed countries tend to impose behind-the-border NTMs on imports from developing countries.  A key contribution of the chapter is to show that an agreement involving border-NTMs is in fact amenable to a terms-of-trade motivation.  Since border-NTMs can exert a negative terms-of-trade externality on trade partners, by causing a reduction in demand for their exports, an agreement over border-NTMs has the same motivation of escaping from a terms-of-trade externality as in the conventional tariff-based ‘terms-of-trade theory’ of trade agreements.[2]

Chapter 2, by Chad Bown, adopts a more traditional focus on tariffs.  The motivation is compelling, arguing that there are 3.5 billion people in the world who have yet to benefit from an agreement to lower tariffs under the GATT/WTO, the overwhelming majority of whom are in developing countries.  The chapter tests for developing countries an implication of the terms-of-trade theory of trade agreements that has been shown to hold in developed countries.  The implication focused on in the chapter is that, through WTO negotiations, members are requested to take on lower tariff binding commitments in products for which they have higher market power, and thus where their tariffs (if left unchecked) would result in larger terms-of-trade externality losses for trade partners.  The chapter identifies well-defined groups of developing countries for which the implication holds, and groups for which it does not, showing that the terms-of-trade theory is relevant to developing-country trade liberalization through trade agreements but is not the only motivation.

Chapter 3, by Rodney Ludema, Anna Maria Mayda, and Jonathon McClure, studies the evolution of the so-called ‘MFN free rider problem’, an implication of the terms-of-trade theory.  In their earlier work, Ludema and Mayda show that an exporting country’s benefit from an MFN tariff concession by another country is proportional to exporter concentration.[3]  An exporting country’s willingness to pay for an MFN tariff concession on the product it exports with tariff concessions of its own depends on how much its refusal to offer concessions would reduce the MFN tariff concession.  The smaller the exporter, the less its refusal would mitigate the tariff cut, and thus the less costly it would be for the exporter to refuse to make a concession, thus free-riding on the concessions of other countries.  An intriguing contribution of the chapter is to show that, through the growth of trade with emerging economies such as China since 1993, the MFN free rider effect is found to have gotten worse.

Chapter 4, by Xuepeng Liu, considers a puzzle concerning so-called non-member participants (NMPs).  NMPs consist of three groups: colonies and overseas territories of GATT members; newly independent states; and provisional members.  NMPs are relevant here because they tend overwhelmingly to be developing countries.  The first econometric literature on the effects of the GATT/WTO explores whether member countries really have different trade patterns than outsiders, thus assessing the effectiveness of the GATT/WTO in liberalizing trade.[4]  The literature shows that they do, but in the process finds an ‘NMP puzzle’: while two formal GATT members trade 61 per cent more than the baseline case of neither country being a formal member nor an NMP, two NMPs trade 140 per cent more than the baseline.  It is counterintuitive that the NMPs should trade even more than formal members.  Chapter 4’s main contribution is to show that the ‘NMP puzzle’ can be resolved by undertaking two relatively simple modifications to the original gravity equation approach of the prior literature.

In Chapter 5, David DeRemer develops a model for analyzing a trade agreement when autarky is the (unique) outcome of non-cooperation over trade policy.  While the canonical model of trade agreements with perfect competition and political economy has proved to be powerful and flexible in explaining many aspects of trade liberalization under the GATT/WTO, it cannot motivate a trade agreement of the kind that DeRemer considers.[5]  Specifically, in the canonical model, if each government has a unilateral preference for autarky then they must have a joint preference for autarky as well.  This limits the scope for studying situations where developing countries have adopted autarkic trade policies for specific sectors, but where there may nevertheless be scope to open these sectors as part of a trade agreement.  For example, developing countries have commonly produced busses and trucks domestically behind high tariff walls.  The chapter adopts a familiar ‘Brander-Spencer’ type model in which to motivate and explore the scope for a trade agreement when autarky is the non-cooperative outcome.

Chapter 6, by Fabrice Defever and Alejandro Riaño, looks at the export promotion policies implemented by China, and how these have promoted the transition of China from autarky in the 1970s to the world’s largest exporting economy today.  The point of departure for this chapter is a set of stylized facts on firm exporting behavior that has been established in the economics literature for the world’s major trading economies: relatively few firms engage in exporting; exporting firms tend to be more productive and hence larger; most firms that do export sell only a small fraction of their output abroad.[6]  The chapter reveals that, on the face of it, the characteristics of Chinese exporters fit the stylized facts listed above. The most striking difference, the chapter finds, is that a third of firms export almost all of their output: China is thus characterized as having a ‘dual export sector’.  The overall conclusion of the chapter is that China’s export promotion policies have been responsible for creating its dual export sector, and have been instrumental in China becoming the world’s largest exporter.

Chapter 7, by Eric Bond, considers whether an efficient trade agreement should allow for gradual trade liberalization to mitigate adjustment costs.  Recent research has shown that the adjustment costs of moving productive resources between sectors in response to trade liberalization are significantly higher than previously thought.[7]  These costs are likely to be particularly high for developing countries, where adjustment is likely to involve geographical relocation between rural and urban settings.  The analytical approach taken in Chapter 7 is to examine the optimal liberalization path between two large countries, where workers face adjustment costs of moving between sectors.  The results show that if tariffs are the only policy instruments available, then developing countries should be allowed longer phase-in periods if their marginal costs of adjustment are higher than in developed countries.  Hence, the analysis shows that there may be a normative justification for so-called ‘special and differential treatment’ of developing countries.

Chapter 8, by Eric Bond and Kamal Saggi, contrasts the roles of price controls and compulsory licensing (CL) to improve consumer access to patented foreign products in developing countries.  While the Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement created a storm of controversy, the eye of the storm was over the implication that, as a result of the agreement, it became more difficult for poor people in developing countries to access medicine at affordable prices.  Under the terms of the TRIPS agreement, if a patent holder refuses to grant access to its product on ‘reasonable’ commercial terms then a government may grant a CL to a different firm to produce the product.  The main lesson of the chapter is that the social value of CL depends crucially on entry costs and the size of the market, and is ambiguous.  This ambiguity seems to be a feature of outcomes under the TRIPS agreement more broadly, making it difficult to assess the extent to which it is beneficial or harmful overall.

The ninth and final chapter, by Mostafa Beshkar and Mahdi Majbouri, tests empirically the outcomes of disputes, focusing on whether or not they lead to litigation, taking explicit account of whether or not the dispute involves developed and/or developing countries.  The chapter focuses on the fact that developing and developed countries show divergent behavior in the dispute settlement process.  A surprising pattern uncovered in Chapter 9 is that, in a dispute between a developed and a developing country, litigation is more likely if the developed country is the defending party.  As detailed in the chapter, 62 per cent of disputes in which a developed country presses charges against a developing country are settled without establishing a dispute panel. In contrast, only 44 per cent of disputes are settled without establishing a dispute panel if a developing country mounts a dispute against a developed country.  Importantly, the chapter shows econometrically that this asymmetry disappears after 2001, when the Advisory Centre on WTO Law (ACWL) was established to make available advice and subsidies to poorer countries, to help them with the costs of mounting a WTO dispute.


Bagwell, K., and R.W. Staiger, (1999); “An Economic Theory of the GATT.”  American Economic Review 89: 215-248.

Bagwell, K., and R.W. Staiger, (2002); The Economics of the World Trading System.  MIT Press, Cambridge (Mass), US.

Bernard, A.B., J.B. Jensen, S.J. Redding, and P.K. Schott, (2007); “Firms in International Trade.” Journal of Economic Perspectives 21(3): 105-130.

Dix-Carneiro, R., (2014); “Trade Liberalization and Labor Market Dynamics.” Econometrica 82(3): 825-885.

Ludema, R., and A.M. Mayda, (2009); “Do Countries Free Ride on MFN?” Journal of International Economics 77(2): 137-150.

Ludema, R., and A.M. Mayda, (2013); “Do Terms-of-Trade Effects Matter for Trade Agreements? Theory and Evidence from WTO Countries.” Quarterly Journal of Economics 128(4): 1837- 1893.

Melitz, M.J., and S.J. Redding (2014); “Heterogeneous Firms and Trade.” Handbook of International Economics, 4th ed, 4: 1-54.

Rose, A., (2004); “Do We Really Know That the WTO Increases Trade?” American Economic Review 94(1): 98-114.

Tomz, M., J.L. Goldstein, and D. Rivers, (2007); “Do We Really Know That the WTO Increases Trade? Comment.”  American Economic Review 97(5): 2005-2018.

Zissimos, B., (forthcoming) The WTO and Economic Development, accepted for publication by MIT Press, Cambridge (Mass), US.


[1] See Zissimos (forthcoming).  The MIT Press have kindly allowed me to post the full text of this volume on my website until the book appears in print.  Please see the above reference for a link.

[2] See Bagwell and Staiger (1999, 2002).

[3] See Ludema and Mayda (2009, 2013).

[4] See Rose (2004), and Tomz, Goldstein and Rivers (2007).

[5] The canonical model is due to Bagwell and Staiger (1999, 2002).

[6] See Bernard, Jensen, Redding and Schott (2007), and Melitz and Redding (2014).

[7] See Dix-Carneiro (2014).

6th InsTED Workshop on “Advances in Institutions, Trade and Economic Development”

The workshop will take place at the University of Nottingham, UK, September 20th-22nd, 2019. Sponsorship by the School of Economics, University of Nottingham, is gratefully acknowledged.

Keynote speakers:

Robin Burgess (London School of Economics)

Giovanni Maggi (Yale University)

We invite submissions at the intersection or union of institutions, international trade and economic development. Topics could include, but are not limited to, the role of international institutions such as the WTO, and the impact of domestic economic or political institutions such as property rights or democracy on international trade and/or economic development.

Submissions are now closed.

Programme (Sep 17th 2019)


You can register here.


Sir Clive Granger Building, University Park.


Delegates can book accommodation at Jubilee Conference Centre (ten minute walk) charged at the university reduced rate of £65/night. We have reserved 20 rooms on Thursday 19th September for up to three nights.   Bookings can be made on a first-come first-served basis by telephoning Jubilee Conference Centre | T: 0115 938 0080 and quoting Hilary Hughes- UON’


Organizers:  Roberto Bonfatti (Nottingham and Padua), Giovanni Facchini (Nottingham), Alejandro Riaño (Nottingham), Ben Zissimos (Exeter) and Isleide Zissimos (Warwick).


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Welcome New Members January 2019

We would like to welcome the following new member to the InsTED Network

Prof Emmanuel Milet (Geneva School of Economics and Management).  His research interests lie in the fields of international trade, servitization of manufacturing firms, and ‘trade and labor’.

Prof Monika Mrázová (Geneva School of Economics and Management). Her research interests lie in the fields of International Trade, Political Economy and Industrial Organization.

Prof Marcelo Olarreaga (Geneva School of Economics and Management).  His research interests are in the fields of economic development and international trade.


Global Political Economy Network Conference: Economies and firms in an age of global uncertainty

The Global Political Economy Network Conference is a new two-day academic event aimed at researchers in international economics, political economy, development economics and international business, as well as at policymakers.

Organised by the School of Business and Economics’s TRANSIT research interest group and Economics discipline groupDr Huw Edwards and Dr Ahmad Ahmad are leading on the development of this event as an annual conference.


The GPEN Conference is expected to be of medium size, aimed at researchers in international economics, political economy, development economics and international business, as well as at policymakers. We have given a fairly broad theme of “An Age Of Uncertainty”, but we are interested in papers from all aspects of international political economy. In particular, we would hope to see papers on:

  • International trade policy and agreements
  • Multinational firms
  • Macroeconomic effects of international policy shocks
  • Policy development and practice

Papers from both experienced researchers and from PhD and early career researchers are welcome. We expect to accept a high proportion of submissions.

Keynote Speakers for the main conference

Journal symposium/special issues

  • To be announced

Special Policy Roundtable: Commercial diplomacy and the promotion of trade

Invited panellists include Huub Ruel, University of Twente; Jan Van Hove, KBC bank and KU Leuven; Richard Given, Department for International Trade. Others to be confirmed.

Submission of Papers

Titles and extended abstracts are to be submitted via conferencemaker

  • Closing deadline for submission: Wednesday, 20 Feb
  • Applicants notified by Friday, 1 March
  • Submission of final papers: Friday, 15 March


  • Regular delegate tickets – £150 per person
  • PhD candidates – Reduced fee of £50 upon approval of student status
  • Registration deadline: Friday, 15 March

To Register

Key dates

Conference: 8 – 9 April (Monday – Tuesday)

Closing deadline for submission: Wednesday, 20 February

Applicants notified by Friday, 1 March

Registration deadline and submission of final papers: Friday, 15 March

2019 Symposium on Economic Experiments in Developing Countries (SEEDEC)

The Center for Effective Global Action (CEGA) and the Experimental Social Science Laboratory (Xlab) are excited to host the 2019 Symposium on Economic Experiments in Developing Countries (SEEDEC) at UC Berkeley on Thursday, May 30th and Friday, May 31st. SEEDEC, now in its eighth year, brings together a community of scholars who employ laboratory experimental economics methods for research in developing countries. Learn about past events here.

This year’s Symposium will feature keynote addresses by Stefano DellaVigna (UC Berkeley) and Pam Jakiela (University of Maryland).

Call for Papers

We invite submissions of papers involving economic lab experiments in low- and middle-income countries, or with clear lessons for LMICs (this does not include field-based randomized controlled trials). Please submit your full paper and supporting materials (optional) using this form no later than March 1st, 2019 at 11:59 PM PT. Successful applicants will be notified by March 31st, 2019.

Submissions will be evaluated based on the quality and novelty of the paper as well as balance across institutions and genders. Though not a formal requirement, preference will be given to papers employing research transparency and reproducibility tools and methods including pre-registration, pre-analysis plans, and open data, materials and code. Authors may provide these details using the online form below, or use the comments section to disclose if some or all of their data or materials cannot be shared for legal or ethical reasons.

Travel and Accommodation

Participants are expected to cover their own travel and accommodation. Visit this link for a list of accommodations close to campus. Breakfast and lunch will be provided on both days.


This event is free and open to the public. Please RSVP here to attend.


Please contact Aleks Bogdanoski () with questions about this Call for Papers.

X RIDGE Forum: Workshop on Poverty and Inequality

The Research Institute for Development, Growth and Economics (RIDGE) and the LACEA Network on Inequality and Poverty (NIP) are pleased to announce a call for papers for the RIDGE Workshop on “Poverty and Inequality”, to be held on 22-23 May in Medellin, Colombia.

Paper submission
Full papers, written in English, must be submitted for consideration for the workshop. The cover page should include: the title of the paper, institutional affiliation, including address, phone and email of each author and an abstract with the appropriate JEL classification. Each author can submit and present at most one paper per workshop (submission of papers to other workshops is possible).

Full papers, in PDF format, should be submitted via the website:
Important dates:

Deadline for paper submission: March 15, 2019 (12 AM ET)
Notification of organizers decision: April 1, 2019
Should you have any questions please contact:

For more information about RIDGE see:

Call for Papers: 18th Annual GEP/CEPR Postgraduate Conference University of Nottingham, United Kingdom 10th – 11th May 2019

The 18th GEP Postgraduate Conference will take place 10th – 11th May 2019 at the University of Nottingham.  The Conference provides a forum for the dissemination of student research relating to issues of Globalisation and Economic Policy from both theoretical and empirical perspectives. These areas include Foreign Direct Investment, Trade, Productivity, Economics of the MNEs, Migration and Labour Market Adjustment.

The objective of the Conference is to bring together a number of PhD students and postdoctoral researchers to discuss their own research ideas with established researchers in a relaxed atmosphere. The conference is open to graduate students and post-docs. Speakers will be selected on the basis of submitted papers or an extended abstract. (Preference will, however, be given to papers.)


Applicants must submit their CV, a letter of support from their PhD supervisor (sent separately by email; this is not required for post-docs) and the paper to be presented.  If a full paper is not yet available, please include a detailed abstract, providing clearly the motivation for the work, the relationship to the literature, the method used and the expected results.

Every paper accepted will be assigned a discussant who will present and comment on the paper. Therefore, those who are invited to present a paper are expected to deliver a complete paper before the Conference.

Applications must be sent by e-mail to:
Dr Alejandro Riaño  

Deadline for submission: 24th February 2019
Keynote speaker: Swati Dhingra (LSE)


There is a £180 registration fee to contribute towards costs which includes up to two nights’ accommodation (10th and 11th May).

Best Paper Prize 

The organising committee will award a prize of ₤100 to the best paper presented at the Conference.

Further information 

Further information on the Conference can be found at:

8th AIEAA Conference, Pistoia, 13-14 June 2019

the 8th AIEAA Conference “Tomorrow’s Food. Diet transition and its implications on health and the environment” will be held in Pistoia on 13- 14 June, 2019.

Despite past progress, approximately 3 billion people across the globe have low-quality diets. Nearly a quarter of all children under five years of age are stunted, more than 2 billion people have insufficient micronutrients. While undernourishment is concentrated in developing countries, the incidence of overweight and obesity is growing in every region. As a result, many economies are seriously underperforming, and diet-related chronic diseases are placing ever-greater demands on health care systems.

At the same time, environmental impacts of current food production and consumption patterns are rampant. The food system contributes to approximately 20-30% of greenhouse gases (GHG) total emissions, 15-25% from agriculture/land use change and 5-10% from packaging, transportation and waste disposal.

The situation is set to worsen dramatically over the next 20 years as powerful drivers of change such as population growth, climate change, diet transition towards animal products and urbanization converge on food systems. This concern is reflected by various Sustainable Development Goals (SDGs) – namely, “Zero hunger” (SDG-2), “Good health and wellbeing” (SDG-3), and “Responsible consumption and production” (SGD-12), just to mention the most important ones – that try to address these issues. While these problems are of utmost urgency for low- and middle-income countries, they are also a stark concern for all countries.

Considerable challenges need to be addressed in order to have an effective and sustainable diet transition. In particular, food systems need to be harnessed so that they nourish rather than merely feed people. This alone will open up countless opportunities for interventions that decision makers can tailor to specific situations. Furthermore, priorities for action at national and international levels as well as detailed advice and guidance need to be identified in order to provide guidance to decision makers.

The 8th AIEAA Congress will therefore focus on the conundrum represented by the interaction of economic development, nutrition and health, and sustainability. Sustainable diets are intended to address the increasing health and environmental concerns related to food production and consumption. Although many candidates for sustainable diets have emerged, a comprehensive analysis of these diets has not been done yet. A number of public policies have been proposed to promote healthy and environmentally sustainable diets at production and consumption levels, but the level of integration is still relatively low. New evidence is needed on the effectiveness of public policies for sustainable diets.

Abstract submission by authors:
15 February 2019

Notification of acceptance to authors:
20 March 2019

Full version of paper / Revised version of long abstract  / Revised version of poster abstract submission:
20 May 2019

Authors’ registration deadline:
20 May 2019

On the Conference website you can now find all the relevant information regarding the call for papers and papers submission (link).

10th Annual Conference of the Trade, Integration, and Growth Network (TIGN)

Bogotá, Colombia, May 23-24, 2019
The 10th Annual Conference of the Trade, Integration, and Growth Network (TIGN) will be held in Bogotá, Colombia, on May 23-24, 2019. This conference is sponsored by the Latin American and Caribbean Economic Association (LACEA), the Inter-American Development Bank (IDB), the CAF-Development Bank of Latin America (CAF), the Research Institute for Development, Growth, and Economics (RIDGE), and Universidad de los Andes, and is hosted by Universidad de los Andes.

The TIGN conference is a unique event that brings together top researchers and policymakers to discuss recent theoretical and empirical advances in trade, integration, and growth broadly defined.

For additional information on this conference and to register and submit a paper please visit:

2019 annual meeting of the Central Bank Research Association (CEBRA)

The 2019 annual meeting of the Central Bank Research Association (CEBRA) is hosted by Columbia University and the Federal Reserve Bank of New York. The scientific committee is chaired by Patricia Mosser, Takatoshi Ito, Stefanie Schmitt-Grohé, and Michael Woodford (all Columbia University).

The meeting commences at 14.00 on Thursday, July 18 with a high-level policy workshop at the Federal Reserve Bank of New York, featuring presentations by Nellie Liang and Jeremy C. Stein, as well as a keynote talk by John C. Williams.

The over 30 contributed sessions and further high-level panels take place on Friday and Saturday, July 19-20 at the Kellogg Center, School of International and Public Affairs, Columbia University. The Bank for International Settlements and Columbia University organize high-level panels. Contributed sessions are organised by Financial Stability Board, International Monetary Fund, Swiss National Bank, Federal Reserve Bank of St. Louis, Bank of Israel, Federal Reserve Bank of Cleveland, European Central Bank, Sveriges Riksbank, Federal Reserve Bank of San Francisco, Norges Bank, Bank of Spain, Bank of Japan, Bank of Canada, Bank of Korea, Oesterreichische Nationalbank (OeNB), Federal Reserve Bank of Minneapolis, Deutsche Bundesbank, Central Bank of Ireland, Columbia University, SAFE/Goethe University Frankfurt, Center for Economic Policy Research, Asian Bureau of Finance and Economic Research, and International Banking Research Network.

The deadline for submissions is Saturday, February 2nd. The submission process is organised by the Research Center “Sustainable Architecture for Finance in Europe” (SAFE) at Goethe University Frankfurt. The link for submissions is:

Submissions for CEBRA’s 2019 annual meeting are being sought on a wide variety of themes, including:

  • Digital currencies, fintech, and technology (sessions 1-3)
  • Regulation, markets, and financial intermediation (sessions 26-31)
  • International economics (sessions 9-13)
  • Macroeconomics, monetary policy, macrofinance, as well as monetary policy frameworks and communication  (sessions 14-25)
  • Inflation dynamics (sessions 6-8)
  • Policy lessons from the history of finance and central banking (sessions 4-5)

The link to the call for papers can be found here.