Membership in the World Trade Organization and Trade Policy Space in Developing Countries

Many scholars and commentators have argued that the membership in the World Trade Organization (WTO) has resulted in the restriction of developing countries' trade policy space, preventing them from industrializing and promoting development. The present article has tested empirically this assertion, using a sample of 87 developing countries over period 1986-2020. It has shown that the WTO membership genuinely has restricted developing countries' trade policy space, and countries that had larger trade policy space have experienced larger trade policy space restrictions. However, these outcomes mask different realities across sub-samples, including Least developed countries (LDCs) - that enjoyed more generous flexibilities in WTO rules - versus NonLDCs, and Article XII member states - those that undertook greater trade liberalization commitments - versus NonArticle XII member states. Importantly, Member states that undertook greater trade policy liberalization commitments experience a higher trade policy space restriction due to their GATT/WTO membership than countries that undertook almost no significant trade liberalization commitments. Finally, countries with larger trade policy space tended to secure a greater trade policy space, as they improved their participation in global trade.