A Deepening/Widening Tradeoff? Evidence from the GATT and WTO

Abstract

This paper proposes that the General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organization (WTO), experienced a deepening/widening tradeoff: as their membership increased (greater width), their effectiveness in promoting trade between members/participants declined (lesser de facto depth). This proposition is tested using gravity models of bilateral trade, first separating the GATT and WTO, which are usually combined into a single variable, and then adding a width variable corresponding to each institution. The results show that (1) both regimes were the deepest, or the most trade effective, when they had the fewest member-states and (2) their trade effectiveness declined, eventually becoming statistically insignificant, as more countries joined. As a quantitative case study, this paper provides some of the first evidence consistent with a tradeoff between depth and width within international institutions.