Legalization of the GATT/WTO and Distribution of its Dispute Settlement Benefits between Developed and Developing Countries

Abstract

How does legalization of international institution distributes its benefits between developed and developing countries? This dissertation answers the question by investigating how the legalization of the GATT into the WTO affects the distribution of its dispute settlement benefits between them. Existing studies present two arguments to this question - the capacity argument and the legalization argument. According to the capacity argument, the legalized WTO continues to favor developed countries in its dispute settlement, just like the less legalized or non-legalized GATT. On the other hand, according to the legalization argument, the legalized WTO favors developing countries more than the GATT because it reduces the impact of bargaining power on dispute settlement. If we look at the use of the dispute settlement mechanism by its member countries, the early years of the WTO and the entire period of the GATT support the capacity argument, but the later period of the WTO does not support this argument. There are significant increases of developing countries participation as the complainants in WTO dispute settlement in its later period. This change in dispute settlement participation by developed and developing countries negates the capacity argument, but it also raises a question to the legalization argument: why has the effect of international legalization taken place conspicuously in the later period of the WTO, not in the early years of the WTO? I argue that legalization of international institution makes socialization of its member countries with it important for their use of the dispute settlement mechanism. This research hypothesizes that the effects of capacity and socialization on the dependent variables - the frequency of its use, the method of its use (bilateral or multilateral), the progress of its procedure, the length of time spent for decisions, and adjudicative results - change depending on legalization of international institution. The results of this study support my argument that legalization of international institution has made the impact of socialization very positive on the use of the dispute settlement mechanism. This explains why there is an increase of its use by developing countries in the WTO, especially in its later period.