Abstract
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.