Replication data for: Adjudication without Enforcement in GATT Disputes

The outcomes of disputes under the General Agreement on Tariffs and Trade (GATT) exhibit a puzzling selection effect. Defendants are more likely to concede to plaintiffs' demands prior to GATT judgments than afterwards, despite GATT's lack of enforcement power. Yet why would states plea bargain if they know they can spurn contrary rulings? To address this puzzle, I develop an incomplete information model of trade bargaining with adjudication as an option. The model suggests an explanation. Namely, the plaintiff has greater resolve prior to a ruling, arising from his belief that the defendant may be compelled to concede to an adverse judgment, even if that belief turns out to be inaccurate after the fact. Surprisingly, this resolve induces more generous settlements even from defendants who intend to not comply should a ruling occur. After a ruling, however, this anticipatory effect is irrelevant, making concessions much less likely. The prospect of adjudication thus conditions the behavior of states even when enforcement is not forthcoming, but not through mechanisms identified by previous studies. Ironically, adjudication works best when threatened but not realized. Disputes under the General Agreement on Tariffs and Trade (GATT) exhibit a puzzling selection effect. Defendants concede more prior to GATT judgments than afterward, despite GATT’s lack of enforcement power. Yet, why would states plea-bargain if they know they can spurn contrary rulings? To find out, the article develops an incomplete information model of trade bargaining with the option of adjudication. The plaintiff has greater resolve prior to a ruling, believing that the defendant might be compelled to concede to an adverse judgment—even if that belief later proves false. Surprisingly, this resolve induces more generous settlements even from defendants who intend not to comply with any ruling. After a ruling, however, this anticipatory effect is irrelevant: adjudication works best when threatened but not realized. The prospect of adjudication thus conditions the behavior of states even when enforcement is not forthcoming but not t hrough mechanisms identified by previous studies.