Working Paper: CEPR ID: DP2340
Authors: Henrik Horn; Petros C. Mavroidis; Hkan Nordstrm
Abstract: The larger trading nations have been the main users of the WTO Dispute Settlement system during its first four years of existence (1995-1998). This has prompted a debate about whether the DS system is biased against smaller and poorer countries, for example, because of a lack of legal capacities and retaliatory power. This paper shows that a simple model in which countries bring disputes proportionally to the diversity and value of exports explains fairly well the dispute pattern. Differences in legal capacities appear to play some role, while 'power' considerations do not seem to matter.
Keywords: dispute settlement; WTO
JEL Codes: F02; F13; K33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| diversity of exports (F10) | number of disputes filed (J52) |
| legal capacity (K36) | likelihood of filing complaints (K41) |
| power dynamics (D74) | pattern of disputes (J52) |
| legal capacity (K36) | DSU usage biases (C29) |
| larger countries (F55) | target smaller countries (F55) |
| smaller countries (F55) | refrain from bringing complaints due to fear of retaliation (J52) |
| G4 countries (F53) | bring more disputes (J52) |