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Do trade flows respond to nudges? Evidence from the WTO’s Trade Policy Review Mechanism
Author(s) -
Kuenzel David J.
Publication year - 2019
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/roie.12394
Subject(s) - economics , commercial policy , international economics , negotiation , international trade , multilateral trade negotiations , trade barrier , transparency (behavior) , free trade , nudge theory , economic integration , world trade , international free trade agreement , political science , law
Abstract Relatively little is known about the economic effects of WTO members’ communications outside of official negotiations and dispute proceedings. This paper considers whether interactions between members through the Trade Policy Review Mechanism, the WTO’s prime transparency institution, lead to subsequent changes in bilateral trade flows. Trade policy concern submissions are more likely to lead to positive trade responses when (i) the receiving country is less concerned about terms‐of‐trade losses, (ii) the submitter is more willing to engage in WTO disputes with the reviewed member to challenge controversial trade policies, and (iii) the submitting country challenges trade policies in the nonchemical manufacturing sector. Nudges through the TPR process are not successful in raising agricultural trade.