Schropp, Simon; Mahlstein, Kornel - International Economics Section, The Graduate Institute … - 2007
(WTO) is an incomplete contract among sovereign states. Incomplete contracts contain gaps. Ex post, contractual gaps may … backtracking behavior. This paper examines the somewhat understudied issue of optimal trade policy flexibility design in the WTO … “liability rule” of escape), or a bilateral renegotiation provision (a “property rule” of escape). Modeling the WTO as a fully …