Choosing the Right Time: A Dynamic Empirical Model of WTO Membership Accession

• In Event: Poster Session: Aid and International Organizations in IPE & Contemporary Issues in Political Science Education
  In Poster Session: Poster Session: Aid and International Organizations in IPE

Abstract

When and why does an international organization (IO) accept a new member? This is empirically challenging to answer due to the dynamic nature of application process: application usually takes a long time and relevant variables change over time. In this paper, I structurally estmiate a dynamic model where a country chooses to apply and World Trade Organization (WTO) chooses to accept. The results show that WTO has concave reversed U-shaped preference over country's economic characteristic: WTO prefers moderately large economy. Moreover, WTO has convex U-shaped preference over the country's political characteristic: WTO prefers both democracy and nondemocracy to unconsolidated regime. In other words, WTO as economic organization does not have preference for a particular polity. WTO only tends to avoid unconsolidated regime which may pose risk against economic performance. As for the applicant, a democratic country views applicant status as costly and member status as beneficial. Consequently, a democratic country strategically chooses to apply when WTO is more likely to accept. On the other hand, a nondemocratic country does not strategically choose to apply because they do not view applicant status as costly. Importantly, while data might suggest that democratic countries are more likely to be accepted by WTO, structural estimation uncovers sample selection effect where democratic countries strategically choose into easier applications.

Author

• Sangmin Lee, University of Rochester