Understanding the Global Regulatory Process
Edited by Francesca Bignami and David Zaring
Chapter 17: How the WTO shapes the regulatory state
Regulatory governance within nation states is transnationally shaped in different ways. By regulatory governance, I refer broadly to national governance characterized by a “rule-based, technocratic and juridical approach to economic governance” that aims to shape the behavior of market actors (Phillips, 2006: 24). Arguably no international organization exercises as broad an influence over national regulatory governance in as many countries as the World Trade Organization (WTO). This chapter provides a new analytic framework regarding the domestic regulatory implications of the WTO, and assesses those implications in light of what we know to date. Most analysis of the WTO treats the organization as if it hovers above the nation state in a separate plane—that of inter-state relations and global governance. The law and economics literature, for example, treats the WTO as a contract between nation states which, if they breach it, is subject to a type of liability rule, enabling “efficient breach” (Schwartz and Sykes, 2002; Mavroidis, 2008). When scholars turn to the link between WTO law and national regulation, they tend to address the issue of “compliance” with WTO dispute settlement decisions, of which there were 154 adopted panel reports and 92 adopted Appellate Body reports as of July 2014. Traditional compliance studies, however, only address second order compliance—compliance with dispute settlement decisions—and not first order compliance—compliance with the rules outside of dispute settlement. They thus only touch the surface of WTO law’s implications for national regulatory governance.
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