On the economic success of GATT/WTO dispute settlement

What features of the dispute settlement process help governments live up to their trade liberalization commitments? Exploiting data on GATT/WTO trade disputes initiated and completed between 1973 and 1998, this paper identifies economic and institutional determinants that help defendant governments commit to liberalizing trade. We find substantial evidence consistent with the theory that power measures, including threat of retaliation by the plaintiff, yield credibility to allow defendant governments to live up to their commitments. We find only limited evidence, however, that particular procedural or institutional features beyond the basic GATT/WTO dispute settlement forum itself contributed to the successful economic resolution of trade disputes.