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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

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.

Suggested Citation

  • Guzman, Andrew & Simmons, Beth A, 2002. "To Settle or Empanel? An Empirical Analysis of Litigation and Settlement at the World Trade Organization," The Journal of Legal Studies, University of Chicago Press, vol. 31(1), pages 205-235, January.
  • Handle: RePEc:ucp:jlstud:v:31:y:2002:i:1:p:s205-35
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    1. repec:spr:revint:v:13:y:2018:i:2:d:10.1007_s11558-018-9304-9 is not listed on IDEAS
    2. Andrew T. Guzman & Beth A. Simmons, 2005. "Power Plays and Capacity Constraints: The Selection of Defendants in World Trade Organization Disputes," The Journal of Legal Studies, University of Chicago Press, vol. 34(2), pages 557-598, June.
    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).
    4. repec:spr:revint:v:13:y:2018:i:1:d:10.1007_s11558-017-9278-z is not listed on IDEAS
    5. Moonhawk Kim, 2016. "Enduring trade disputes: Disguised protectionism and duration and recurrence of international trade disputes," The Review of International Organizations, Springer, vol. 11(3), pages 283-310, September.
    6. Giovanni Maggi & Robert W. Staiger, 2017. "Learning by Ruling and Trade Disputes," NBER Working Papers 23774, National Bureau of Economic Research, Inc.
    7. Thomas A. Zimmermann, 2005. "WTO Dispute Settlement at Ten: Evolution, Experiences, and Evaluation," International Trade 0504003, EconWPA.
    8. 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.
    9. Bernauer, Thomas & Spilker, Gabriele, 2010. "Escalation dynamics in WTO disputes over environment, health and safety issues," Papers 89, World Trade Institute.
    10. Spilker, Gabriele, 2013. "The WTO Dispute Settlement Mechanism – Enforcement, State Power, and Dispute Recurrence," Papers 584, World Trade Institute.
    11. Lee, Jiwon & Wittgenstein, Teresa, 2017. "Weak vs. Strong Ties: Explaining Early Settlement in WTO Disputes," ILE Working Paper Series 7, University of Hamburg, Institute of Law and Economics.
    12. Barbara Koremenos, 2007. "If Only Half of International Agreements Have Dispute Resolution Provisions, Which Half Needs Explaining?," The Journal of Legal Studies, University of Chicago Press, vol. 36(1), pages 189-212, January.
    13. Spilker, Gabriele, 2013. "Compliance with WTO Dispute Rulings," Papers 585, World Trade Institute.
    14. Bouët, Antoine & Metivier, Jeanne, 2017. "Is the WTO dispute settlement procedure fair to developing countries?," IFPRI discussion papers 1652, International Food Policy Research Institute (IFPRI).

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