Measuring the Cost of Lost Policy Space at the WTO

Original Publication Date: 
20 March, 2007

This policy brief summarizes the key findings of a recent paper published in the Journal of World Investment and Trade that show how the shrinking of policy space is more than a theoretical concern at the World Trade Organization. Contrary to claims that nations can circumvent the WTO to promote development, new research finds that not only do many of the rules negotiated in the Uruguay Round constrict the ability of nations to put in place aggressive development policies, but these rules have been strictly enforced by WTO dispute panels. Indeed, more than 25% of all WTO cases between 1995 and 2005 dealt with dismantling policy space in developing countries. These findings imply that developing nations should exercise great caution in negotiating measures in the Doha Round that further restrict policy space, especially given the small gains projected to arise from a likely deal.