ESTUDIOS Y ANÁLISIS: DOCUMENTOS DE TRABAJO

Indisputably Essential: The Economics of Dispute Settlement Institutions in Trade Agreements

Economic theory has made considerable progress in explaining why sovereign countries cooperate in trade. Central to most theories of trade cooperation are issues of self-enforcement: The threat of reprisal by an aggrieved party maintains the initial balance of concessions and prevents opportunism.

However, economic scholarship has been less coherent in explaining why countries choose to settle and enforce their trade disputes with the help of an impartial third party, a “trade court”. Typically, economists focusing on the purpose of trade agreements have assumed away the very reasons why institutions are needed, since under standard assumptions, neither defection from the rules nor disputes are expected to occur.

This paper is a step towards the formulation of a coherent economic theory of dispute settlement. It challenges traditional models of enforcement (primarily concerned with acts of punishment) for being insufficient in explaining the existence of dispute settlement institutions. We perform a comprehensive analysis of the economics of dispute settlement institutions and demonstrate to what extent the literatures of trade cooperation and dispute institutions are (and should be) interlinked. On the basis of these theories, we show that dispute settlement institutions in trade agreements may assume a variety of roles, including that of an information repository and disseminator, an honest broker, an arbitrator and calculator of damages, an active information gatherer or an adjudicator.

Nº: ERSD-2007-02

Autores:
Alexander Keck — OMC
Simon Schropp — University of St. Gallen (HSG), HEI Geneva and NCCR Democracy

Fecha de redacción: septiembre de 2007

Palabras clave:

Dispute settlement, trade, institutions, enforcement, WTO.

Código JEL:

F02, F13, F51, F53, F55, K33, K41, K42

 

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Este es un documento de trabajo y se refiere, por consiguiente, a un estudio en curso. Refleja las opiniones personales de funcionarios o especialistas invitados y es el resultado de trabajos de investigación profesionales. No pretende reflejar la posición o las opiniones de la OMC o de sus Miembros ni la posición oficial de ningún funcionario. Los errores que puedan existir son responsabilidad de los autores. Pueden obtenerse ejemplares de este documento de trabajo en la Secretaría de la División, en la dirección siguiente: División de Desarrollo y Estudios Económicos, Organización Mundial del Comercio, rue de Lausanne 154, CH-1211 Ginebra 21, Suiza. Sírvanse indicar en su solicitud el título y el número del documento.

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