Are external commitments a partial cure for weak governance?
The quality of public governance may affect the effect of WTO accessions. Ex ante, there are two hypotheses on the interaction between country’s public governance and commitments under WTO accessions. The first hypothesis posits that countries with poor governance benefit more from the external commitment, for it induces them to carry through more reforms than they would not do unilaterally. A second possibility is that countries with weak governance may have lower capacity to carry out any given reform mandated by the accession agreement. Which of the two alternatives dominates is an interesting empirical question. For a sample of 15 nations that joined the WTO since 1995, we construct an index of accession commitments based on WTO Working Party reports. The resulting metric shows substantial variability in the degree of commitments among accession countries. We interact this measure with a measure of country’s governance quality, which we proxy with data on quality of governance from
