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Northwestern Journal of International Law & Business
World Trade Organization; Dispute settlement; General Agreement on Tariffs and Trade; reputational sanction; complainant win-rate
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Why Does The Complainant Always Win At The Wto?: A Reputation-Based Theory Of Litigation At The World Trade Organization, Matthew C. Turk
Why Does The Complainant Always Win At The Wto?: A Reputation-Based Theory Of Litigation At The World Trade Organization, Matthew C. Turk
Northwestern Journal of International Law & Business
World Trade Organization (WTO) litigation presents an empirical puzzle: complaining parties "win" close to 90 percent of cases, while standard theories of litigation predict a strong tendency towards a 50 percent plaintiff win-rate. This Article explains the high win-rate by examining the reputational costs and benefits of filing a case. The WTO's lack of centralized enforcement means that the consequence of a judgment is merely to disseminate information that alters a party's reputation for compliance with its trade obligations. Such a "reputational sanction" applies to both losing respondents and complainants. The result is that only cases with a very high …