The Role of Dispute Settlement Procedures in International Trade Agreements*

Maggi, Giovanni; Staiger, Robert W.

doi:10.1093/qje/qjq005

Cited by 84 publications

(58 citation statements)

References 19 publications

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“…Such dispute costs have played a significant role in prior theory of the WTO dispute settlement process. Maggi and Staiger (2011) argue that a dispute cost is important for explaining a pro-trade bias in WTO rulings.…”

Section: Payoffsmentioning

confidence: 99%

Suspiciously timed trade disputes

Conconi

DeRemer

Kirchsteiger

et al. 2017

Journal of International Economics

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This paper shows that electoral incentives affect the occurrence of trade disputes. Focusing on WTO disputes filed by the United States during the 1995-2012 period, we show that U.S.presidents are more likely to initiate a dispute in the year preceding their re-election date.Moreover, disputes filed by the U.S. tend to target industries that are important to swing states in the presidential election. To explain these regularities, we develop a theoretical model in which an incumbent can file a trade dispute to appeal to voters motivated by reciprocity. The incumbent's ability to initiate a dispute during the re-election campaign provides an advantage over the challenger, who cannot commit to file the dispute if elected. If voters' ideological preferences are not too strong in favor of either candidate, the incumbent will file a trade dispute to increase his re-election chances. To explain these regularities, we develop a theoretical model in which an incumbent can file a trade dispute to appeal to voters motivated by reciprocity. The incumbent's ability to initiate a dispute during the re-election campaign provides an advantage over the challenger, who cannot commit to file the dispute if elected. If voters' ideological preferences are not too strong in favor of either candidate, the incumbent will file a trade dispute to increase his re-election chances.JEL classifications: F13, D72, D78, D63.

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Section: Payoffsmentioning

confidence: 99%

Suspiciously timed trade disputes

Conconi

DeRemer

Kirchsteiger

et al. 2017

Journal of International Economics

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show abstract

“…We briefly describe here research that adopts this perspective. Maggi and Staiger (2011) provide a first analysis of roles that dispute settlement might play in a trade agreement modeled as an incomplete contract. Trade takes place between two countries in a single industry.…”

Section: Contract Completionmentioning

confidence: 99%

“…A two-period extended model is also considered to explore implications of allowing the court to establish precedent. Maggi and Staiger (2011) derive a number of results assessing different degrees of court activism. First, it is never optimal to allow the court to modify obligations that are clearly stated in the contract.…”

Section: Contract Completionmentioning

confidence: 99%

Is the WTO Passé?

Bagwell

Bown

Staiger

2016

Journal of Economic Literature

Self Cite

102

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The WTO has delivered policy outcomes that are very different from those likely to emerge out of the recent wave of preferential trade agreements (PTAs). Should economists see this as an efficient institutional hand-off, where the WTO has carried trade liberalization as far as it can manage, and is now passing the baton to PTAs to finish the job? We survey a growing economics literature on international trade agreements and argue on this basis that the WTO is not passé. Rather, and subject to some caveats, our survey of research to date suggests that the WTO warrants strong support while a more cautious view of PTAs seems appropriate. (JEL F13, F14, K33, N70)

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“…In a case study of the 1966 ruling of the International Court of Justice in the South West Africa case, Johns shows how a surprise ruling could both undermine the regime and destabilize relations in the region. The efficiency of dispute settlement as a means for actors to complete an incomplete contract by clarifying interpretation or filling gaps depends on the accuracy of the court (Maggi and Staiger 2011). These theories highlight the importance of assessing whether courts play the role of objective arbiter of the law.…”

Section: A Critical Look At the Role Of Legalizationmentioning

confidence: 99%

The political logic of dispute settlement: Introduction to the special issue

Davis

2015

Rev Int Organ

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In the absence of centralized enforcement authority, international institutions have devised a wide range of measures to enforce agreements. At one extreme, states have delegated authority to third party legal bodies to interpret and rule on compliance with authorization of sanctions to punish violations. At the other end of the spectrum, states rely upon peer pressure to encourage compliance and agree to negotiate over any differences of interpretation. Researchers have broadly explored two dimensions of dispute settlement: the variation in design of dispute settlement provisions within institutions and the pattern of state behavior within established dispute processes. This special issue pushes forward research on both dimensions while raising new agenda for probing the political determinants of institutional design and state behavior in dispute settlement. Are judges immune from the influence of power considerations in their rulings? Why do we observe electoral cycles in the pattern of case filings in the WTO? How does sensitivity to interest group pressure shape the structure of dispute settlement? In addition, the articles bring new insights from comparison across issue areas. What explains the variation of dispute design across issue areas? Does legalization of one issue area generate ripple effects that shape behavior for other issue areas? Finally, the articles hone in on critical micro-level differences within dispute settlement. Stepping beyond the issue of why states establish enforcement measures and description of the initiation and disposition of cases, the articles consider details such as the economic stakes at hand and conditions that favor resolving disputes with direct compensation.The challenge to cooperation arises from uncertainty over compliance given incentives for others to cheat or free ride in the face of mixed incentives and collective action problems. This places dispute settlement at the heart of any theory of cooperation. Institutions work to the extent they can provide information that lowers

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The Role of Dispute Settlement Procedures in International Trade Agreements*

Cited by 84 publications

References 19 publications

Suspiciously timed trade disputes

Suspiciously timed trade disputes

Is the WTO Passé?

The political logic of dispute settlement: Introduction to the special issue

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