What Is Litigation in the World Trade Organization Worth?
Journal
International Organization
ISSN
0020-8183
ISSN-Digital
1531-5088
Type
journal article
Date Issued
2015-10-01
Author(s)
Abstract
Conventional wisdom holds that the creation of international, court-like institutions helps countries to peacefully settle trade conflicts, thereby enhancing overall welfare. Many scholars and pundits have argued, however, that these institutions remain ultimately ineffective, because they merely reflect the distribution of power in the anarchic international system. We explore how litigation in the WTO affects bilateral trade between countries involved in a trade dispute. We find that sectoral exports from complainant countries to the defendant increase by about $10.5 billion in the three years after a panel ruling. However, countries that have proactively filed a complaint and carried the main costs of litigation do not systematically gain more than less active third parties that merely joined an existing WTO dispute and carried smaller litigation costs. We conclude that international judicial institutions can provide positive economic externalities and may thereby lead to a less power-based distribution of the gains from trade.
Language
English
Keywords
Trade
trade disputes
trade barriers
WTO
International institutions
legalization
judicialization
international law
positive externalities
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Cambridge University Press
Publisher place
Cambridge, Mass.
Volume
69
Number
2
Start page
375
End page
403
Pages
28
Subject(s)
Division(s)
Eprints ID
222428