IDEAS home Printed from https://ideas.repec.org/a/spr/revint/v11y2016i1p89-120.html
   My bibliography  Save this article

Why do some international institutions contain strong dispute settlement provisions? New evidence from preferential trade agreements

Author

Listed:
  • Todd Allee
  • Manfred Elsig

Abstract

To understand why some international institutions have stronger dispute settlement mechanisms (DSMs) than others, we investigate the dispute settlement provisions of nearly 600 preferential trade agreements (PTAs), which possess several desirable case-selection features and are evoked more than is realized. We broaden the study of dispute settlement design beyond “legalization” and instead reorient theorizing around a multi-faceted conceptualization of the strength of DSMs. We posit that strong DSMs are first and foremost a rational response to features of agreements that require stronger dispute settlement, such as depth and large memberships. Multivariate empirical tests using a new data set on PTA design confirm these expectations and reveal that depth – the amount of policy change specified in an agreement – is the most powerful and consistent predictor of DSM strength, providing empirical support to a long-posited but controversial conjecture. Yet power also plays a sizeable role, since agreements among asymmetric members are more likely to have strong DSMs due to their mutual appeal, as are those involving the United States. Important regional differences also emerge, as PTAs across the Americas are designed with strong dispute settlement, as are Asian PTAs, which contradicts the conventional wisdom about Asian values and legalization. Our findings demonstrate that rationalism explains much of international institutional design, yet it can be enhanced by also incorporating power-based and regional explanations. Copyright Springer Science+Business Media New York 2016

Suggested Citation

  • Todd Allee & Manfred Elsig, 2016. "Why do some international institutions contain strong dispute settlement provisions? New evidence from preferential trade agreements," The Review of International Organizations, Springer, vol. 11(1), pages 89-120, March.
    • Handle: RePEc:spr:revint:v:11:y:2016:i:1:p:89-120
    DOI: 10.1007/s11558-015-9223-y
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11558-015-9223-y
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11558-015-9223-y?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Elsig, Manfred & Eckhardt, Jappe, 2015. "The Creation of the Multilateral Trade Court: Design and Experiential Learning," World Trade Review, Cambridge University Press, vol. 14(S1), pages 13-32, July.
    2. Goldstein, Judith & Kahler, Miles & Keohane, Robert O. & Slaughter, Anne-Marie, 2000. "Introduction: Legalization and World Politics," International Organization, Cambridge University Press, vol. 54(3), pages 385-399, July.
    3. Keith Jaggers & Ted Robert Gurr, 1995. "Tracking Democracy's Third Wave with the Polity III Data," Journal of Peace Research, Peace Research Institute Oslo, vol. 32(4), pages 469-482, November.
    4. Andreas Dür & Leonardo Baccini & Manfred Elsig, 2014. "The design of international trade agreements: Introducing a new dataset," The Review of International Organizations, Springer, vol. 9(3), pages 353-375, September.
    5. Martin, Lisa L., 1992. "Interests, power, and multilateralism," International Organization, Cambridge University Press, vol. 46(4), pages 765-792, October.
    6. Keohane, Robert O. & Moravcsik, Andrew & Slaughter, Anne-Marie, 2000. "Legalized Dispute Resolution: Interstate and Transnational," International Organization, Cambridge University Press, vol. 54(3), pages 457-488, July.
    7. Barbara Koremenos, 2007. "If Only Half of International Agreements Have Dispute Resolution Provisions, Which Half Needs Explaining?," The Journal of Legal Studies, University of Chicago Press, vol. 36(1), pages 189-212, January.
    8. Busch, Marc L., 2007. "Overlapping Institutions, Forum Shopping, and Dispute Settlement in International Trade," International Organization, Cambridge University Press, vol. 61(4), pages 735-761, October.
    9. Alter, Karen J. & Helfer, Laurence R., 2010. "Nature or Nurture? Judicial Lawmaking in the European Court of Justice and the Andean Tribunal of Justice," International Organization, Cambridge University Press, vol. 64(4), pages 563-592, October.
    10. Kristian Skrede Gleditsch, 2002. "Expanded Trade and GDP Data," Journal of Conflict Resolution, Peace Science Society (International), vol. 46(5), pages 712-724, October.
    11. Chase, Claude & Yanovich, Alan & Crawford, Jo-Ann & Ugaz, Pamela, 2013. "Mapping of dispute settlement mechanisms in regional trade agreements: Innovative or variations on a theme?," WTO Staff Working Papers ERSD-2013-07, World Trade Organization (WTO), Economic Research and Statistics Division.
    12. Bown,Chad P. & Pauwelyn,Joost (ed.), 2010. "The Law, Economics and Politics of Retaliation in WTO Dispute Settlement," Cambridge Books, Cambridge University Press, number 9780521119979, October.
    13. Rosendorff, B. Peter, 2005. "Stability and Rigidity: Politics and Design of the WTO's Dispute Settlement Procedure," American Political Science Review, Cambridge University Press, vol. 99(3), pages 389-400, August.
    14. Dür, Andreas & Baccini, Leonardo & Elsig, Manfred, 2014. "The design of international trade agreements: introducing a new dataset," LSE Research Online Documents on Economics 59179, London School of Economics and Political Science, LSE Library.
    15. Axel Berger & Matthias Busse & Peter Nunnenkamp & Martin Roy, 2013. "Do trade and investment agreements lead to more FDI? Accounting for key provisions inside the black box," International Economics and Economic Policy, Springer, vol. 10(2), pages 247-275, June.
    16. Giovanni Maggi, 1999. "The Role of Multilateral Institutions in International Trade Cooperation," American Economic Review, American Economic Association, vol. 89(1), pages 190-214, March.
    17. Copelovitch, Mark S. & Putnam, Tonya L., 2014. "Design in Context: Existing International Agreements and New Cooperation," International Organization, Cambridge University Press, vol. 68(2), pages 471-493, April.
    18. Duffield, John S., 2003. "The Limits of “Rational Design”," International Organization, Cambridge University Press, vol. 57(2), pages 411-430, April.
    19. Yoram Haftel, 2013. "Commerce and institutions: Trade, scope, and the design of regional economic organizations," The Review of International Organizations, Springer, vol. 8(3), pages 389-414, September.
    20. Mitchell, Ronald B., 1994. "Regime design matters: intentional oil pollution and treaty compliance," International Organization, Cambridge University Press, vol. 48(3), pages 425-458, July.
    21. Downs, George W. & Rocke, David M. & Barsoom, Peter N., 1996. "Is the good news about compliance good news about cooperation?," International Organization, Cambridge University Press, vol. 50(3), pages 379-406, July.
    22. Chad P. Bown, 2004. "On the Economic Success of GATT/WTO Dispute Settlement," The Review of Economics and Statistics, MIT Press, vol. 86(3), pages 811-823, August.
    23. Gray, Julia & Slapin, Jonathan B., 2013. "Exit Options and the Effectiveness of Regional Economic Organizations," Political Science Research and Methods, Cambridge University Press, vol. 1(2), pages 281-303, December.
    24. repec:gig:joupla:v:5:y:2013:i:3:p:97-132 is not listed on IDEAS
    25. Daniel W. Drezner, 2007. "Bringing the Great Powers Back In, from All Politics Is Global: Explaining International Regulatory Regimes," Introductory Chapters, in: All Politics Is Global: Explaining International Regulatory Regimes, Princeton University Press.
    26. Raustiala, Kal & Victor, David G., 2004. "The Regime Complex for Plant Genetic Resources," International Organization, Cambridge University Press, vol. 58(2), pages 277-309, April.
    27. Kahler, Miles, 2000. "Legalization as Strategy: The Asia-Pacific Case," International Organization, Cambridge University Press, vol. 54(3), pages 549-571, July.
    28. Wendt, Alexander, 2001. "Driving with the Rearview Mirror: On the Rational Science of Institutional Design," International Organization, Cambridge University Press, vol. 55(4), pages 1019-1049, October.
    29. Christopher Marcoux, 2009. "Institutional Flexibility in the Design of Multilateral Environmental Agreements," Conflict Management and Peace Science, Peace Science Society (International), vol. 26(2), pages 209-228, April.
    30. Kara Leitner & Simon Lester, 2009. "WTO Dispute Settlement 1995-2008 A Statistical Analysis," Journal of International Economic Law, Oxford University Press, vol. 12(1), pages 195-208, March.
    31. Abbott, Kenneth W. & Keohane, Robert O. & Moravcsik, Andrew & Slaughter, Anne-Marie & Snidal, Duncan, 2000. "The Concept of Legalization," International Organization, Cambridge University Press, vol. 54(3), pages 401-419, July.
    32. Koremenos, Barbara & Lipson, Charles & Snidal, Duncan, 2001. "The Rational Design of International Institutions," International Organization, Cambridge University Press, vol. 55(4), pages 761-799, October.
    33. Thomas Bernauer & Anna Kalbhenn & Vally Koubi & Gabriele Spilker, 2013. "Is there a “Depth versus Participation” dilemma in international cooperation?," The Review of International Organizations, Springer, vol. 8(4), pages 477-497, December.
    34. Clint Peinhardt & Todd Allee, 2012. "Failure to Deliver: The Investment Effects of US Preferential Economic Agreements," The World Economy, Wiley Blackwell, vol. 35(6), pages 757-783, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Adela Toscano-Valle & Antonio Sianes & Francisco Santos-Carrillo & Luis A. Fernández-Portillo, 2022. "Can the Rational Design of International Institutions Solve Cooperation Problems? Insights from a Systematic Literature Review," Sustainability, MDPI, vol. 14(13), pages 1-22, June.
    2. Johann Robert Basedow, 2022. "Why de‐judicialize? Explaining state preferences on judicialization in World Trade Organization Dispute Settlement Body and Investor‐to‐State Dispute Settlement reforms," Regulation & Governance, John Wiley & Sons, vol. 16(4), pages 1362-1381, October.
    3. Renee Bowen & Manfred Elsig, 2018. "Trade and investment: Introduction to the special issue," The Review of International Organizations, Springer, vol. 13(2), pages 137-142, June.
    4. Tuuli-Anna Huikuri, 2023. "Constraints and incentives in the investment regime: How bargaining power shapes BIT reform," The Review of International Organizations, Springer, vol. 18(2), pages 361-391, April.
    5. Bernhard Reinsberg & Oliver Westerwinter, 2021. "The global governance of international development: Documenting the rise of multi-stakeholder partnerships and identifying underlying theoretical explanations," The Review of International Organizations, Springer, vol. 16(1), pages 59-94, January.
    6. Sikina Jinnah & David Morrow & Simon Nicholson, 2021. "Splitting Climate Engineering Governance: How Problem Structure Shapes Institutional Design," Global Policy, London School of Economics and Political Science, vol. 12(S1), pages 8-19, April.
    7. Tarald Gulseth Berge & Øyvind Stiansen, 2023. "Bureaucratic capacity and preference attainment in international economic negotiations," The Review of International Organizations, Springer, vol. 18(3), pages 467-498, July.
    8. Susanne Lütz, 2021. "Global–Regional Realignments in Trade, Finance and Development: Introduction to the Special Issue," Global Policy, London School of Economics and Political Science, vol. 12(S4), pages 5-13, May.
    9. Manfred Elsig & Sebastian Klotz, 2021. "Digital Trade Rules in Preferential Trade Agreements: Is There a WTO Impact?," Global Policy, London School of Economics and Political Science, vol. 12(S4), pages 25-36, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lee, Jiwon & Wittgenstein, Teresa, 2017. "Weak vs. Strong Ties: Explaining Early Settlement in WTO Disputes," ILE Working Paper Series 7, University of Hamburg, Institute of Law and Economics.
    2. Adela Toscano-Valle & Antonio Sianes & Francisco Santos-Carrillo & Luis A. Fernández-Portillo, 2022. "Can the Rational Design of International Institutions Solve Cooperation Problems? Insights from a Systematic Literature Review," Sustainability, MDPI, vol. 14(13), pages 1-22, June.
    3. Baccini, Leonardo & Dür, Andreas & Elsig, Manfred, 2015. "The politics of trade agreement design: revisiting the depth-flexibility nexus," LSE Research Online Documents on Economics 62303, London School of Economics and Political Science, LSE Library.
    4. James Hollway & Jean-Frédéric Morin & Joost Pauwelyn, 2020. "Structural conditions for novelty: the introduction of new environmental clauses to the trade regime complex," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 20(1), pages 61-83, March.
    5. Thomas Bernauer & Anna Kalbhenn & Vally Koubi & Gabriele Spilker, 2013. "Is there a “Depth versus Participation” dilemma in international cooperation?," The Review of International Organizations, Springer, vol. 8(4), pages 477-497, December.
    6. Jason S. Davis, 2022. "Screening for losers: Trade institutions and information," The Review of International Organizations, Springer, vol. 17(1), pages 1-37, January.
    7. Christina Davis, 2015. "The political logic of dispute settlement: Introduction to the special issue," The Review of International Organizations, Springer, vol. 10(2), pages 107-117, June.
    8. Diana Panke, 2020. "Regional cooperation through the lenses of states: Why do states nurture regional integration?," The Review of International Organizations, Springer, vol. 15(2), pages 475-504, April.
    9. Fabio Franchino & Camilla Mariotto, 2021. "Noncompliance risk, asymmetric power and the design of enforcement of the European economic governance," European Union Politics, , vol. 22(4), pages 591-610, December.
    10. Soo Yeon Kim, 2021. "Investment commitments in PTAs and MNCS in partner countries," Economics and Politics, Wiley Blackwell, vol. 33(3), pages 415-442, November.
    11. Kyle Bagwell & Chad P. Bown & Robert W. Staiger, 2016. "Is the WTO Passé?," Journal of Economic Literature, American Economic Association, vol. 54(4), pages 1125-1231, December.
    12. Tobias Böhmelt & Gabriele Spilker, 2016. "The interaction of international institutions from a social network perspective," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 16(1), pages 67-89, February.
    13. Tobias Lenz & Besir Ceka & Liesbet Hooghe & Gary Marks & Alexandr Burilkov, 2023. "Discovering cooperation: Endogenous change in international organizations," The Review of International Organizations, Springer, vol. 18(4), pages 631-666, October.
    14. Karen Alter, 2016. "William Phelen. 2015. In place of inter-state retaliation: The European Union’s rejection of WTO-style trade sanctions (Oxford: Oxford University Press)," The Review of International Organizations, Springer, vol. 11(1), pages 145-149, March.
    15. Tobias Böhmelt, 2022. "Environmental-agreement design and political ideology in democracies," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 22(3), pages 507-525, September.
    16. Tobias Böhmelt & Edita Butkutė, 2018. "The self-selection of democracies into treaty design: insights from international environmental agreements," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 18(3), pages 351-367, June.
    17. Francisco Santos-Carrillo & Luis A. Fernández-Portillo & Antonio Sianes, 2020. "Rethinking the Governance of the 2030 Agenda for Sustainable Development in the COVID-19 Era," Sustainability, MDPI, vol. 12(18), pages 1-24, September.
    18. Steffen Mohrenberg & Vally Koubi & Thomas Bernauer, 2019. "Effects of funding mechanisms on participation in multilateral environmental agreements," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 19(1), pages 1-18, February.
    19. Christopher Marcoux, 2009. "Institutional Flexibility in the Design of Multilateral Environmental Agreements," Conflict Management and Peace Science, Peace Science Society (International), vol. 26(2), pages 209-228, April.
    20. Liesbet Hooghe & Gary Marks, 2015. "Delegation and pooling in international organizations," The Review of International Organizations, Springer, vol. 10(3), pages 305-328, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:revint:v:11:y:2016:i:1:p:89-120. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.