The World Trade Organization (WTO) dispute settlement system is its judicial arm and enforcement mechanism, designed to assist members in resolving trade disputes that arise between them. Its design reflects a move toward greater legalization in trade governance under the multilateral trade regime. Compared with the dispute settlement system of its predecessor, the General Agreement on Tariffs and Trade (GATT), the WTO’s dispute settlement provided a more structured and formal process with clearly defined stages and more discipline in the timetable of the dispute so as to resolve trade disputes as efficiently as possible. Most important, the WTO’s dispute settlement provides for virtually automatic adoption of panel rulings: a respondent losing a case can block the adoption only if it can persuade all members of the WTO not to do so. The legal basis for the WTO’s dispute settlement system is the Dispute Settlement Understanding (DSU), which provides the principles and procedures by which members may bring their trade disputes to the multilateral trade regime for resolution. Overseeing the dispute settlement process is the Dispute Settlement Body (DSB), which consists of all WTO members and meets regularly to receive and to adopt reports of disputes at their various stages of progress. How effective is the WTO’s dispute settlement mechanism? Effectiveness can be conceptualized as success in attaining the objectives of the dispute settlement under the WTO in three areas: the efficiency of dispute settlement; inclusiveness of the dispute settlement process, especially as it concerns developing country participation; and compliance with legal obligations resulting from arbitration. The existing scholarship on this topic features key debates and frontiers for future research on firms and global production networks/value chains that have the potential to advance our state of knowledge concerning this “crown jewel” of the multilateral trade regime.
Mary Anne Madeira
International trade and state efforts to liberalize or restrict trade generate very contentious politics. Trade creates winners and losers at the individual level, firm level, industry level, national level, and even regional level. It also generates conflict among transnational social groups, such as environmental advocacy organizations, human rights organizations, and transnational business alliances. Because of this complexity of the politics of international trade, scholars of international political economy (IPE) can focus on different levels of analysis and a variety of stages of the political decision-making process. Scholars agree that not only societal preferences but collective action problems, domestic institutions, and international factors all affect trade politics and policy outcomes. These aspects of trade politics together form the key influences on trade policy and whether it is liberal or protectionist in nature. Societal preferences constitute the initial inputs into the trade policy-making process. Understanding how different groups of economic actors within society win or lose from trade liberalization or protection is the first step toward understanding trade politics and trade policy outcomes. Once societal trade preferences are formed, they must be aggregated into cohesive pressure groups or grass-roots movements whose purpose is to influence trade policy. This is easier for some groups of actors to achieve than others. In lobbying government actors on policy, interest groups find that domestic institutions play an important role translating societal inputs into policy outputs. Policy-making institutions vary in the degree to which they are susceptible to special-interest lobbying versus the preferences of broader societal coalitions, and electoral rules and party structures also affect policy outcomes, with certain configurations creating a bias toward more protectionism or liberalization. In addition to these domestic-level influences on trade policy, IPE scholars have extensively studied the ways that international factors also affect trade policy outcomes such as the extent of liberalization and the content of what is liberalized (e.g., manufactures versus agricultural goods versus services). International factors such as the distribution of power, the character of international institutions and trade agreements (e.g., multilateral versus bilateral), transnational civil society and diffusion processes may be thought of as inputs into the policy-making process as well. Systemic conditions may constrain the types of policies that governments can adopt, or they may open the door to a range of possible policy outcomes that are nevertheless limited by the preferences of domestic societal actors.
Marc R. DeVore
Dwight David Eisenhower delivered one final address to the American public on January 17, 1961, as he prepared to step down from the U.S. presidency. Often remembered as an inarticulate public speaker, Eisenhower surprised his audience with his clear warning that “in the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.” Eisenhower’s words resonated with both his audience and subsequent generations because he gave voice to the growing level of popular anxiety over whether armaments’ increasing importance to national security would ultimately endow defense firms with a degree of power incompatible with liberal democracy. Although Eisenhower’s concerns about defense firms’ antidemocratic potential echoed those of policymakers and scholars since the First World War, Eisenhower’s formulation of the military-industrial complex problématique followed on the heels of earlier analytic models—notably the “merchants of death” and “garrison state” hypotheses—and preceded later rearticulations, such as that of the “iron triangle.” It is possible now, with a century of perspective on this literature, to assess which hypotheses about defense firms’ deleterious impact on society and government have been borne out by subsequent events and which have not. Within this context, many of the worst fears embodied in the earlier theories have not been borne out by subsequent events. Defense firms did not “cause” wars as per the merchants-of-death hypothesis, and democracy did not give way in states where it already existed to the authoritarian rule of “specialists of violence.” Nonetheless, the core insight of the military-industrial complex and iron triangle schools of thought—that defense industries and their allies in the military and politics will act as an interest group to promote procurement projects—has proven robust. The way that these dynamics occur, however, varies from state to state as a function of their institutions. Even though the production of armaments by defense firms headquartered in one’s state exercises a distorting effect on national politics and military procurement, few states can escape this dynamic. The national security advantages of greater supply security and enhanced military adaptation, combined with the fear that once abandoned, defense-industrial capabilities cannot be quickly reconstituted, compels most states that can produce armaments to do so. A military-industrial complex, of some form, is thus a fatality for the modern state.