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American Economic Review: Vol. 96 No. 3 (June 2006)
AER Volume. 96, Issue 3 | 
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Will International Rules on Subsidies Disrupt the World Trading System?
Article Citation
Bagwell, Kyle, and
Robert W. Staiger. 2006. "Will International Rules on Subsidies Disrupt the World Trading System?."
American Economic Review,
96(3): 877-895.
DOI: 10.1257/aer.96.3.877
DOI: 10.1257/aer.96.3.877
Abstract
We provide a first formal analysis of the international rules that govern the use of subsidies to domestic production. Our analysis highlights the impact of the new subsidy disciplines that were added to GATT rules with the creation of the WTO. While GATT subsidy rules were typically viewed as weak and inadequate, our results suggest that the key changes introduced by the WTO subsidy rules may ultimately do more harm than good to the multilateral trading system by undermining the ability of tariff negotiations to serve as the mechanism for expanding market access to more efficient levels. (JEL: F02, F11, F13, F15, F53)
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Authors
Bagwell, Kyle
Staiger, Robert W.
Staiger, Robert W.
