Publication Type

Working Paper

Version

publishedVersion

Publication Date

8-2002

Abstract

This paper attempts to study the usage of the GATT/WTO dispute settlement mechanism and to explain its patterns across different regimes and decades, using a unified theoretical model. This study first explores the role of the degree of legal controversy over a panel ruling in determining countries’ incentives to block/appeal a panel report under the GATT/WTO regime. The model is able to explain the surge in blocking incidence during the 1980s over the preceding GATT years and the immense frequency at which the new appellate procedure under the WTO is invoked. Furthermore, a two-sided asymmetric information framework is used to study the effects of political power on countries’ incentives to use, and interactions in using, the GATT/WTO dispute settlement mechanism. It is shown that the magnitude of the political cost, relative to the potential benefit that the complainant stands to gain when using this mechanism, determines the pattern of filing activity and the frequency of various procedural outcomes. This result, when confronted with the statistics on disputes in different decades of the GATT regime, provides an indicator of how well the dispute procedure has worked during various decades, in terms of how much this procedure has been subject to potential power politics.

Keywords

GATT/WTO, dispute settlement

Discipline

Dispute Resolution and Arbitration | International Economics

Research Areas

International Economics

Volume

13-2002

First Page

1

Last Page

38

Publisher

SMU Economics and Statistics Working Paper Series, No. 13-2002

City or Country

Singapore

Copyright Owner and License

Authors

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