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Abstract:
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Previous research on the success of the WTO dispute settlement system
may miscalculate the true benefits of the dispute process due to the nature
of the datasets used. Approximately 33 percent of all disputes filed at the
WTO are classified as pending or inactive, and thus omitted from most
studies. Further investigation reveals that many of these inactive cases
were actually settled by the countries involved or considered in a similar
WTO dispute and, as a result, no further WTO action was taken. This
suggests that the WTO dispute settlement process may be more effective
in resolving disputes than otherwise thought. For those disputes not
successfully resolved, I empirically estimate why countries may choose to
initiate WTO dispute settlement action but fail to follow through, thus
allowing the offending party to continue with the alleged WTO-illegal
activities. The results suggest that developing countries are less likely to
resolve their complaints in the WTO dispute settlement system, a
troubling implication for the equity of the system. |