A Positive Theory of WTO Adjudication

Abstract

The positive theory of litigation predicts that under certain conditions plaintiffs and defendants achieve an unremarkable and roughly equivalent share of litigation success. This article, grounded in an empirical analysis of WTO adjudication from 1995 through 2007, reveals a high disparity between Complainant and Respondent success rates: Complainants win roughly 90 percent of the disputes. This disparity transcends case type, country identity, income level and other litigant-specific characteristics. After analyzing and discarding standard empirical and theoretical alternative explanations for the systematic disparity in success rates, this study demonstrates that biased rule development explains this disparity through an examination of patterns in WTO adjudicators' notorious decisions. This article then discusses the effect of biased rule development on perceptions of the WTO dispute settlement system's democratic legitimacy and legality.

Keywords: Positive Theory of Litigation, Litigation Success, Empirical Analysis, WTO Adjudication, Rule Development, Disparity, Patterns, WTO Dispute Settlement, GATT

JEL Classification: K33, K41, F13