Working Paper: NBER ID: w23774
Authors: Giovanni Maggi; Robert W. Staiger
Abstract: Over the WTO years, the frequency of disputes and court rulings has trended downwards. Such trends are sometimes interpreted as symptoms of a dispute resolution system in decline. In this paper we propose a theory that can explain these trends as a result of judicial learning; thus according to our theory such trends represent good news, not bad news. We then offer evidence that the predictions of our model are consistent with WTO trade dispute data, and we take a first step towards estimating the strength and scope of court learning.
Keywords: WTO; trade disputes; judicial learning; dispute resolution
JEL Codes: D02; F13; K33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| judicial learning (K40) | decrease in frequency of disputes (J52) |
| cumulative past rulings (K41) | decrease in frequency of disputes (J52) |
| cumulative past rulings (K41) | decrease in frequency of rulings (K41) |
| judicial learning (K40) | decrease in frequency of rulings (K41) |
| cumulative past rulings (K41) | increase in court quality (K41) |
| increase in court quality (K41) | increase in joint payoffs for governments (H19) |
| decrease in disputes (J52) | improved court quality (L15) |