Who Gets to Be In the Room? Manipulating Participation in WTO Disputes

Third parties complicate WTO dispute settlement by adding voices and issues to a dispute. However, complainants can limit third parties by filing cases under Article XXIII of GATT, rather than Article XXII. Why do some countries make settlement more difficult by promoting third parties? We argue that third parties create "insurance" by lowering the benefit of winning and the cost of losing a dispute. We construct a formal model in which third parties make settlement less likely. The weaker the complainant's case, the more likely she is to promote third party participation and to settle. So Article XXII cases are more likely to settle, controlling for the realized number of third parties, and a complainant who files under Article XXIII is more likely to win a ruling and less likely to see that ruling appealed by the defendant. We provide empirical support using WTO disputes from 1995 to 2011