Skip to main content

Does WTO Dispute Settlement Enforce or Inform?

  • Thomas Sattler, Gabriele Spilker and Thomas Bernauer

Whereas some researchers emphasize how World Trade Organization (WTO) dispute settlement reduces complexity and clarifies legislation, others argue that dispute rulings promote co-operation by providing an enforcement mechanism. This article identifies empirical implications from these distinct arguments and tests them on WTO disputes from 1995 to 2006. The study's analytical approach combines a three-step coding of dispute escalation with a strategic bargaining model and statistical backwards induction to account for governments’ forward-looking behavior. It finds strong support for the argument that WTO dispute settlement primarily serves as an enforcement device. It finds much less support for the argument that dispute settlement reduces complexity and clarifies trade law. These results suggest that the role of WTO dispute settlement in generating information on acceptable trade policy standards is less relevant than proponents of the complexity argument tend to assume.

Hide All

Department of International Relations, LSE (email:; Center for Comparative and International Studies, ETH Zurich (emails: and, respectively). A version of this manuscript has been presented at the 4th Annual Conference on the Political Economy of International Organizations, 27–29 January 2011, Zurich. Jeffrey Kucik and Laura Zoratto gave valuable comments on an earlier draft. Marianne Furrer, Quynh Nguyen and Gwen Tiernan provided excellent research assistance. Finally, we thank four anonymous reviewers and the journal's editor, Kristian Skrede Gleditsch, for extremely helpful advice that improved this research. This article was written in the context of the Swiss National Research Program on Trade Regulation. Data replication sets are available at

Hide All
Abbott, Kenneth W. Snidal, Duncan. 1998. Why States Act Through Formal International Organizations. The Journal of Conflict Resolution 42:332.
Allee, Todd. 2010a. The Distinctiveness of Developing Country Trade Dispute Initiation. Manuscript, University of Illinois.
Allee, Todd. 2010b. Legal Incentives and Domestic Rewards: A Litigation Model of GATT/WTO Dispute Resolution. Manuscript, University of Illinois.
Allee, Todd Huth, Paul. 2006. Legitimizing Dispute Settlement: International Legal Rulings as Domestic Political Cover. American Political Science Review 100:219234.
Barbieri, Katherine, Keshk, Omar, Pollins., Brian 2008. Correlates of War Project Trade Dataset Codebook, Version 2.01., accessed 19 July 2010.
Barrett, Scott. 2006. Environment and Statecraft: The Strategy of Environmental Treaty-Making. Oxford: Oxford University Press.
Bas, Muhammet A., Signorino, Curis S. Walker, Robert W.. 2008. Statistical Backwards Induction: A Simple Method for Estimating Recursive Strategic Models. Political Analysis 16:2140.
Bechtel, Michael, Sattler., Thomas Forthcoming. What is Litigation in the WTO Worth? International Organization.
Bernauer, Thomas. 2003. Genes, Trade and Regulation: The Seeds of Conflict in Food Biotechnology. Princeton, NJ: Princeton University Press.
Bernauer, Thomas, Elsig, Manfred Pauwelyn, Joost. 2012. The Dispute Settlement Mechanism: Analysis and Problems. In The Oxford Handbook on the World Trade Organization, edited by Amrita Narlikar, Martin Daunton, and Robert M. Stern, 485506. Oxford: Oxford University Press.
Bernauer, Thomas Meins, Erika. 2003. Technological Revolution Meets Policy and the Market: Explaining Cross-National Differences in Agricultural Biotechnology Regulation. European Journal of Political Research 42:643683.
Bown, Chad P. 2004a. Developing Countries as Plaintiffs and Defendants in GATT/WTO Trade Disputes. The World Economy 27:5980.
Bown, Chad P. 2004b. On the Economic Success of GATT/WTO Dispute Settlement. Review of Economics and Statistics 86:811823.
Busch, Marc L. Reinhardt, Eric. 2000. Bargaining in the Shadow of the Law: Early Settlement in GATT/WTO Disputes. Fordham International Law Journal 24:158172.
Chayes, Abram Chayes, Antonia H.. 1993. On Compliance. International Organization 47:175205.
Coase, Ronald. 1960. The Problem of Social Cost. Journal of Law and Economics 3:144.
Davis, Christina L. 2008. The Effectiveness of WTO Dispute Settlement: An Evaluation of Negotiation Versus Adjudication Strategies. Paper Presented at the Annual Meeting of the American Political Science Association, Boston, MA 28–31 August.
Davis, Christina L. Bermeo, Sarah B.. 2009. Who Files? Developing Country Participation in GATT/WTO Adjudication. Journal of Politics 71:10331049.
Davis, Christina L. Shirato, Yuki. 2007. Firms, Governments, and WTO Adjudication: Japan's Selection of WTO Disputes. World Politics 59:274313.
Downs, George, Rocke, David M. Barsoom, Peter. 1996. Is the Good News About Compliance Good News for Cooperation? International Organization 53:379406.
Elsig, Manfred Stucki, Philipp. 2012. Low-Income Developing Countries and WTO Litigation: Why Wake Up the Sleeping Dog? Review of International Political Economy 19:292316.
Fearon, James D. 1994. Signaling Versus the Balance of Power and Interests: An Empirical Test of a Crisis Bargaining Model. Journal of Conflict Resolution 38:236269.
Fearon, James D. 1995. Rationalist Explanations for War. International Organization 49:379414.
Francois, Joseph, Horn, Henrik, Kaunitz., Niklas 2008. Trading Profiles and Developing Country Participation in the WTO Dispute Settlement System. International Centre for Trade and Sustainable Development Issue Paper No. 6.
Goldstein, Judith O., Kahler, Miles, Keohane, Robert O. Slaughter, Anne-Marie. 2000. Introduction: Legalization and World Politics. International Organization 54:385399.
Guzman, Andrew. 2002. The Cost of Credibility: Explaining Resistance to Interstate Dispute Resolution Mechanisms. Journal of Legal Studies 31:303326.
Guzman, Andrew Simmons, Beth A.. 2002. To Settle or Empanel? An Empirical Analysis of Litigation and Settlement at the World Trade Organisation. Journal of Legal Studies 31:205235.
Hofmann, Tobias, Kim., Soo Yeon 2009. The Political Economy of Compliance in WTO Disputes. Paper Presented at the International Political Economy Society Conference, College Station, TX, 13–14 November.
Hudec, Robert E. 1993. Enforcing International Trade Law: The Evolution of the Modern GATT Legal System. Salem, NH: Butterworth Legal Publishers.
Jervis, Robert. 1976. Perception and Misperception in International Relations. Princeton: Princeton University Press.
Keohane, Robert. 1984. After Hegemony: Cooperation, and Discord in the World Political Economy. Princeton: Princeton University Press.
Koremenos, Barbara, Lipson, Charles Snidal, Duncan. 2001. The Rational Design of International Institutions. International Organization 55:761799.
Lewis, Jeffrey B. Schultz, Kenneth A.. 2003. Revealing Preferences: Empirical Estimation of a Crisis Bargaining Game with Incomplete Information. Political Analysis 11:345367.
Milgrom, Paul Roberts, John. 1992. Economics, Organization, and Management. Englewood Cliffs: Prentice Hall.
Mitchell, Ronald B. 2006. Problem Structure, Institutional Design, and the Relative Effectiveness of International Environmental Agreements. Global Environmental Politics 6:7289.
Moravcsik, Andrew. 2000. The Origins of Human Rights Regimes: Democratic Delegation in Postwar Europe. International Organization 54:217252.
Olson, Mancur. 1971. The Logic of Collective Action. Cambridge, MA: Harvard University Press.
Posner, Eric A. Yoo, John C.. 2005. Judicial Independence in International Tribunals. California Law Review 93:374.
Reinhardt, Eric. 2001. Adjudication Without Enforcement in GATT Disputes. Journal of Conflict Resolution 452:174195.
Rosendorff, B. Peter. 2005. Stability and Rigidity: Politics and Design of WTO's Dispute Settlement Procedure. American Political Science Review 99:389400.
Rosendorff, B. Peter Milner, Helen. 2001. The Optimal Design of International Trade Institutions: Uncertainty and Escape. International Organization 55:829857.
Sattler, Thomas Bernauer, Thomas. 2011. Gravitation or Discrimination? Determinants of Litigation in the World Trade Organization. European Journal of Political Research 50 (2):143167.
Signorino, Curis S. 1999. Strategic Interaction and the Statistical Analysis of International Conflict. American Political Science Review 93:279298.
Signorino, Curis S. Tarar, Ahmer. 2006. A Unified Theory and Test of Extended Immediate Deterrence. American Journal of Political Science 50:586605.
Simmons, Beth A. 2000. International Law and State Behavior: Commitment and Compliance in International Monetary Affairs. American Political Science Review 94:819835.
Smith, James M. 2000. The Politics of Dispute Settlement Design: Explaining Legalism in Regional Trade Pacts. International Organization 54 (1):137180.
Stone, Randall W., Slantchev, Branislav L. London, Tamar R.. 2008. Choosing How to Cooperate: A Repeated Public-goods Model of International Relations. International Studies Quarterly 52 (2):335362.
Stone Sweet, Alec Brunell, Thomas. 1998. Constructing a Supranational Constitution: Dispute Resolution and Governance in the European Community. American Political Science Review 92:6381.
Underdal, Arild. 1998. Explaining Compliance and Defection: Three Models. European Journal of International Relations 4:530.
Whang, Taehee. 2010. Empirical Implications of Signaling Models: Estimation of Belief Updating in International Crisis Bargaining. Political Analysis 18:381402.
Williamson, Oliver. 1985. The Economic Institutions of Capitalism. New York: Free Press.
Young, Oran R. 1994. International Governance: Protecting the Environment in a Stateless Society. Ithaca, NY: Cornell University Press.
Recommend this journal

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

British Journal of Political Science
  • ISSN: 0007-1234
  • EISSN: 1469-2112
  • URL: /core/journals/british-journal-of-political-science
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
Type Description Title
Supplementary materials

Sattler Supplementary Material

 Unknown (74 KB)
74 KB


Full text views

Total number of HTML views: 17
Total number of PDF views: 173 *
Loading metrics...

Abstract views

Total abstract views: 445 *
Loading metrics...

* Views captured on Cambridge Core between September 2016 - 25th March 2018. This data will be updated every 24 hours.