Effect of the duration of membership in the GATT/WTO on economic growth volatility

Abstract

This article investigates how the duration of membership in the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) affects economic growth volatility. Using an unbalanced panel dataset of 153 countries over the period 1980–2019, it has revealed that the duration of membership in the GATT/WTO reduces economic growth volatility, with this negative effect being larger in member states that have been subject to rigorous accession procedures. More importantly, the membership duration exerts a larger dampening economic growth volatility effect as countries further upgrade their export products. It also exerts a larger negative effect on economic growth volatility in countries that enjoy a greater openness to international trade. These findings complement the findings of the positive economic growth effect of the membership in the GATT/WTO, by showing that more than the mere membership in the GATT/WTO, the duration of such membership affects economic growth volatility.