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To Settle or Empanel? An Empirical Analysis of Litigation and Settlement at the World Trade Organization

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  • Guzman, Andrew
  • Simmons, Beth A
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    Abstract

    This paper seeks to understand the factors that cause disputes at the World Trade Organization to move from the negotiation stage to the panel stage. We hypothesize that transfer payments between states are costly to arrange and that the lowest-cost transfers are those that relate directly to the issue in dispute. This implies that when the subject matter of the dispute has an all-or-nothing character and leaves little room for compromise (for example, health and safety regulations), the parties' ability to reach an agreement through the use of transfers is restricted. In contrast, if the subject matter of dispute permits greater flexibility (for example, tariff rates), the parties can more easily structure appropriate transfer payments through adjustments to the disputed variable. We conduct an empirical test of this hypothesis, finding support for it among democratic states. Copyright 2002 by the University of Chicago.

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    Bibliographic Info

    Article provided by University of Chicago Press in its journal Journal of Legal Studies.

    Volume (Year): 31 (2002)
    Issue (Month): 1 (January)
    Pages: S205-35

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    Handle: RePEc:ucp:jlstud:v:31:y:2002:i:1:p:s205-35

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    Web page: http://www.journals.uchicago.edu/JLS/

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    Cited by:
    1. Talya Bobick & Alastair Smith, 2013. "The impact of leader turnover on the onset and the resolution of WTO disputes," The Review of International Organizations, Springer, vol. 8(4), pages 423-445, December.
    2. Thomas A. Zimmermann, 2005. "WTO Dispute Settlement at Ten: Evolution, Experiences, and Evaluation," International Trade 0504003, EconWPA.
    3. Javelosa, Josyline C. & Schmitz, Andrew, 2006. "Costs and Benefits of a WTO Dispute: Philippine Bananas and the Australian Market," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 7(1).

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