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Should WTO dispute settlement be subsidized?

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  • Wilckens, Sebastian

Abstract

This paper develops a model of the WTO dispute settlement process (DSP) to study the recent proposal by legal scholars to subsidize litigation costs. The high cost of litigation, so the argument, is a major obstacle for developing countries to using the DSP to enforce developed countries? compliance with WTO rules. The paper shows that this proposal may be misguided. In particular, a reduction of litigation costs may lead large countries to impose larger trade impediments where before they may have raised barriers only a little. Thus, a cost reduction may even weaken the smaller countries? position in the DSP. Moreover, the model sheds light on the structure of the dark figure of un-accused offenses, suggesting that the observed record of disputes notified to the WTO is systematically biased.

Suggested Citation

  • Wilckens, Sebastian, 2007. "Should WTO dispute settlement be subsidized?," Economics Working Papers 2007-02, Christian-Albrechts-University of Kiel, Department of Economics.
    • Handle: RePEc:zbw:cauewp:5439
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    References listed on IDEAS

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    More about this item

    Keywords

    Developing Countries; Dispute Settlement; GATT/WTO; Tariff Retaliation; Trade Disputes;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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