Skip to main content
    • Aa
    • Aa

Stability and Rigidity: Politics and Design of the WTO's Dispute Settlement Procedure


The increased “legalization” embodied in the revised Dispute Settlement Procedure (DSP) of the World Trade Organization (WTO) is shown to be an institutional innovation that increases the opportunities for states to temporarily suspend their obligations in periods of unexpected, but heightened, domestic political pressure for protection. This increased flexibility in the system reduces per-period cooperation among states but also reduces the possibility that the regime may break down entirely. There is shown to be a trade-off between rigidity and stability in international institutional design in the face of unforeseen, but occasionally intense, domestic political pressure. In a model with a WTO that serves both an informational and adjudicatory role, it is established that agreements with DSPs are self-enforcing, are more stable, and are more acceptable to a wider variety of countries than agreements without DSPs. Evidence drawn from data on preferential trading agreements supports the key hypotheses.

Corresponding author
B. Peter Rosendorff is Associate Professor, International Relations and Economics, and Director, Center for International Studies, University of Southern California, University Park, Los Angeles, CA 90089-0037. Email: Thanks to Bill Ethier, Todd Sandler, Helen Milner, seminar participants at the Regional Integration Network Meeting in Montevideo, 2004; American Political Science Association Annual Meeting in Philadelphia, 2003; at Public Choice Society Annual Meetings, San Diego, March 2002; Latin American and Caribbean Economic Association Annual Meetings, Montevideo, Uruguay, October 2001, to the editor and three anonymous referees.
Linked references
Hide All

This list contains references from the content that can be linked to their source. For a full set of references and notes please see the PDF or HTML where available.

BagwellKyle, and Robert W.Staiger. 1999. “An Economic Theory of the GATT.” American Economic Review 89 (March): 21548.

BaldwinRichard. 1987. “Politically Realistic Objective Functions and Trade Policy.” Economics Letters 24 (3): 28790.

BelloJudith Hippler. 1996. “The WTO Dispute Settlment Understanding: Less is More.” American Journal of International Law 90: 41618.

BownChad P. 2004. “On the Economic Success of GATT/WTO Dispute Settlement.” The Review of Economics and Statistics 86 (August): 81123.

ChayesAbram, and Antonia HandlerChayes. 1993. “On Compliance.” International Organization 47 (Spring): 175205.

DownsGeorge W., D.M.Rocke, and P.B.Barsoom. 1996. “Is the Good News about Compliance Good News about Cooperation?International Organization 50 (Summer): 379406.

EthierWilfred J. 2001. “Punishments and Dispute Settlement in Trade Agreements.” PIER Working Paper No. 01-021.

FearonJames D. 1998. “Bargaining, Enforcement and International Cooperation.” International Organization 52 (Spring): 269305.

GoldsteinJudith, and Lisa L.Martin. 2000. “Legalization, Trade Liberalization, and Domestic Politics: A Cautionary Note.” International Organization 54 (Summer): 60332.

GoldsteinJudith, MilesKahler, RobertKeohane, and Anne-MarieSlaughter. 2000. “Introduction: Legalization and World Politics.” International Organization 54 (Summer): 385400.

HoekmanBernard M., and Michel M.Kostecki. 2001. The Political Economy of the World Trading System. 2nd ed. New York: Oxford University Press.

JacksonJohn H. 1997a. “Editorial Comment: The WTO Dispute Settlement Understanding—Misunderstandings on the Nature of Legal Obligation.” American Journal of International Law 91: 5964.

MaggiGiovanni. 1999. “The Role of Multilateral Institutions in International Trade Cooperation.” American Economic Review 89 (March): 190214.

MansfieldEdward D., Helen V.Milner, and B. PeterRosendorff. 2002. “Why Democracies Cooperate More: Electoral Control and International Trade Agreements,” International Organization 56 (Fall): 477514.

MilgromPaul R., Douglass C.North, and Barry R.Weingast. 1990. “The Role of Institutions in the Revival of Trade: The Law Merchant, Private Judges, and the Champagne Fairs.” Economics and Politics 2 (March): 123.

MilnerHelen V., and B.Peter Rosendorff 1996. “Trade Negotiations, Information and Domestic Politics.” Economics and Politics 8 (July): 14589.

NorthDouglass C. 1990. Institutions, Institutional Change, and Economic Performance. New York: Cambridge University Press.

PutnamRobert D. 1988. “Diplomacy and Domestic Politics: The Logic of Two-Level Games.” International Organization 42 (Summer): 42760.

ReinhardtEric. 2001. “Adjudication Without Enforcement in GATT Disputes.” Journal of Conflict Resolution 45 (April): 17495.

RosendorffB. Peter, and Helen V.Milner. 2001. “The Optimal Design of International Trade Institutions: Uncertainty and Escape.” International Organization 55 (Fall): 82957.

SetearJohn K. 1997. “Responses to Breach of a Treaty and Rationalist International Relations Theory: The Rules of Release and Remediation in the Law of Treaties and the Law of State Responsibility.” Virginia Law Review 83: 1127.

SmithJames McCall. 2000. “The Politics of Dispute Settlement Design: Explaining Legalism in Regional Trade Pacts.” International Organization 54 (Winter): 13780.

StaigerRobert, and GuidoTabellini. 1999. “Do GATT Rules Help Governments Make Domestic Commitments?Economics and Politics 11 (July): 10944.

SykesAlan. 1991. “Protectionism as a Safeguard.” University of Chicago Law Review 58: 255305.

Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

American Political Science Review
  • ISSN: 0003-0554
  • EISSN: 1537-5943
  • URL: /core/journals/american-political-science-review
Please enter your name
Please enter a valid email address
Who would you like to send this to? *


Full text views

Total number of HTML views: 6
Total number of PDF views: 97 *
Loading metrics...

Abstract views

Total abstract views: 252 *
Loading metrics...

* Views captured on Cambridge Core between September 2016 - 26th May 2017. This data will be updated every 24 hours.