VIRTUOUS OR VICIOUS CIRCLE? LEGITIMACY AND EFFECTIVENESS IN WTO DISPUTE SETTLEMENT THIRTY YEARS ON

Over the past three decades, numerous studies have explored the legitimacy and effectiveness of the World Trade Organization’s (WTO) dispute settlement system (DSS). While these studies have recognized the significance of both legitimacy and effectiveness to judicial governance at the WTO, they have largely overlooked the relationship between these two qualities. Yet, despite their analytical differences, legitimacy and effectiveness are intricately intertwined. Together, they can form a mutually reinforcing relationship, creating a virtuous circle of governance in which high levels of legitimacy enhance the effectiveness of an institution, while effective governance, in turn, bolsters its legitimacy. However, the creation of such a circle is not guaranteed. It may be hindered by various conditions and intervening mechanisms, potentially giving rise to a vicious circle of governance, where illegitimacy and ineffectiveness reinforce each other in a downward spiral. This article examines the relationship between legitimacy and effectiveness in the WTO DSS as it has evolved since its establishment in 1995. It demonstrates that, while the DSS has managed to maintain a virtuous circle of governance for over two decades, the ongoing Appellate Body crisis has disrupted this cycle, entangling the DSS in a negative feedback loop between legitimacy and effectiveness. This analysis provides a valuable lens through which to evaluate the DSS and the existential crisis it faces as it marks its thirtieth anniversary. The insights offered may deepen our understanding of the DSS’s operations and limitations thus far and inform efforts toward its reform.