The WTO Dispute Settlement System: A First Assessment from an Economic Perspective

Item Type Journal paper

We explore the incentives countries face in trade litigation within the new WTO Dispute Settlement System. Our analysis yields a number of interesting predictions. First, because sanctions are ruled out during the litigation process, the Dispute Settlement System does not preclude all new trade restrictions. However, the agenda-setting capacity of the complainant, including its right to force a decision, make traderestrictions less attractive than under the WTO's predecessor GATT. Second, the system's appellate review provides the losing defendant with strong incentives to delay negative findings, and both parties with a possibility to signal their determinacy in fighting the case. Third, a relatively weak implementation procedure potentially reinforces incentives to violate WTO trade rules. Fourth, bilateral settlements are more likely at an early stage in the process and are biased towards the expected outcome of the formal dispute settlement procedure. empirical evidence based on a first data set of cases at an advanced stage of the litigation process provides qualitative support for our claims. (pdf, 230k)

Authors Bütler, Monika & Hauser, Heinz
Journal or Publication Title Journal of Law, Economics & Organization
Language English
Keywords World Trade Organisation
Subjects economics
HSG Classification contribution to scientific community
Refereed No
Date 1 October 2000
Publisher Oxford Univ. Press
Place of Publication Cary, NC
Volume 16
Number 2
Page Range 503-533
Number of Pages 31
ISSN 8756-6222
ISSN-Digital 1465-7341
Publisher DOI 10.1093/jleo/16.2.503
Depositing User Dr. Thomas Alexander Zimmermann
Date Deposited 19 Apr 2005 12:06
Last Modified 25 Sep 2021 00:19



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Bütler, Monika & Hauser, Heinz (2000) The WTO Dispute Settlement System: A First Assessment from an Economic Perspective. Journal of Law, Economics & Organization, 16 (2). 503-533. ISSN 8756-6222

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