The mainstream mythology says that free trade needs a government-like structure on an international level in order to thrive. Two papers from the NBER seriously challenge that idea, not on the level of theory, but by the experience thus far with the World Trade Organization.
- Do WTO Members have More Liberal Trade Policy?: “This paper uses 68 measures of trade policy and trade liberalization to ask if membership in theWorld Trade Organization (WTO) and its predecessor the General Agreement on Tariffs and Trade (GATT) is associated with more liberal trade policy. Almost no measures of trade policy are significantly correlated with GATT/WTO membership. Trade liberalizations, when they occur, usually lag GATT entry by many years, and the GATT/WTO often admits countries that are closed and remain closed for years. “
- Do We Really Know that the WTO Increases Trade?: ”An extensive search reveals little evidence that countries joining or belonging to the GATT/WTO have different trade patterns than outsiders.”
