Participation in WTO Dispute Settlement: Complainants, Interested Parties, and Free Riders

What affects a country’s decision of whether to formallyengage in a trade dispute directly related to its exportinginterests? This article empirically examines determinants ofaffected country participation decisions in formal trade litigationarising under the World Trade Organization (wto) between 1995and 2000. It investigates determinants of nonparticipation andexamines whether the incentives generated by the system’srules and procedures discourage active engagement in disputesettlement by developing country members in particular. Thoughthe size of exports at stake is found to be an important economicdeterminant affecting the decision to participate in challengesto a wto-inconsistent policy, the evidence also shows that measuresof a country’s retaliatory and legal capacity as wellas its international political economy relationships matter.These results are consistent with the hypothesis of an implicit"institutional bias" generated by the system’s rules andincentives that particularly affects developing economy participationin dispute settlement.