Skip to main content Accessibility help
×
Home
Hostname: page-component-55597f9d44-54vk6 Total loading time: 0.612 Render date: 2022-08-10T12:56:23.051Z Has data issue: true Feature Flags: { "shouldUseShareProductTool": true, "shouldUseHypothesis": true, "isUnsiloEnabled": true, "useRatesEcommerce": false, "useNewApi": true } hasContentIssue true

2 - What Can Financial Markets Tell Us about International Courts and Deterrence?

from Part I

Published online by Cambridge University Press:  23 June 2018

Marlene Wind
Affiliation:
University of Copenhagen
Get access

Summary

Can international courts deter? Much scholarship relies on the answer being ‘yes’. In this view, the rulings of international courts are thought to have effects beyond a given case, changing global expectations over the measures ruled on and making further violations less likely. Yet public international law explicitly denies the possibility of such deterrence. Little empirical work assesses these competing claims. In this chapter, we describe the novel approach we have taken in our recent work, by looking to financial markets reactions to World Trade Organization rulings. We ask whether investors downgrade a firm when a policy similar to the one it benefits from has been found in violation in another country. Using a quantitative case study of rulings against Canada’s support of its solar industry, we find measured empirical support for such a deterrent effect. Yet a caveat is in order: the Appellate Body’s rulings appear to exert a greater deterrent effect than ad hoc panellists. The debate over the deterrence effects of courts remains open. Yet our findings suggest that financial markets appear willing to bet on courts deterring similar violations in countries not party to a dispute.

Type
Chapter
Information
Publisher: Cambridge University Press
Print publication year: 2018

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Bhala, R. (1998–1999). The Myth about Stare Decisis and International Trade Law (Part One of a Trilogy). American University International Law Review, 14, 845956.Google Scholar
Blonigen, B. A. & Bown, C. P. (2003). Antidumping and Retaliation Threats. Journal of International Economics, 60(2), 249–73.CrossRefGoogle Scholar
Bolton, J. R. (2001). Risks and Weaknesses of the International Criminal Court from America’s Perspective. The Law and Contemporary Problems, 64, 167.CrossRefGoogle Scholar
Busch, M. & Pelc, K. (2009). Does the WTO Need a Permanent Body of Panelists? Journal of International Economic Law 12(3), 579–94.CrossRefGoogle Scholar
Busch, M. L. & Pelc, K. J. (2015). Dispute Settlement in the WTO. In Martin, L. L., ed., The Oxford Handbook of the Political Economy of International Trade, Oxford; New York: Oxford University Press, p. 400.Google Scholar
Damaska, M. (2008). What Is the Point of International Criminal Justice. Chicago-Kent Law Review, 83, 329.Google Scholar
Davis, C. L. (2012a). WTO Adjudication as a Tool for Conflict Management. Technical report Working Paper, Princeton University.Google Scholar
Davis, C. L. (2012b). Why Adjudicate? Enforcing Trade Rules, Princeton, NJ; Oxford: Princeton University Press.CrossRefGoogle Scholar
Davis, C. L. & Shirato, Y. (2007). Firms, Governments, and WTO Adjudication. World Politics, 59(2), 274313.CrossRefGoogle Scholar
Elsig, M. (2013). Legalization Leap and International Institutions –The Design of the WTOs Dispute Settlement System. ISA Annual Convention, San Francisco.
Gilligan, M. J. (2006). Is Enforcement Necessary for Effectiveness? A Model of the International Criminal Regime. International Organization, 60, 935–67.CrossRefGoogle Scholar
Helfer, L. R. & Voeten, E. (2014). International Courts as Agents of Legal Change: Evidence from LGBT Rights in Europe. International Organization, 68(1), 77110.CrossRefGoogle Scholar
Hudec, R. (1993). Enforcing International Trade Law: The Evolution of the Modern GATT Legal System, Ann Arbor, MI: Butterworth Legal Publishers.Google Scholar
Johnstone, I. (2003). Security Council Deliberations: The Power of the Better Argument. European Journal of International Law, 14(3), 437–80.CrossRefGoogle Scholar
Kim, H. & Sikkink, K. (2010). Explaining the Deterrence Effect of Human Rights Prosecutions for Transitional Countries. International Studies Quarterly, 54(4), 939–63.CrossRefGoogle Scholar
Kratochwil, F. V. (1991). Rules, Norms, and Decisions: On the Conditions of Practical and Legal Reasoning in International Relations and Domestic Affairs, Cambridge: Cambridge University Press.Google Scholar
Kucik, J. & Pelc, K. J. (2015). Measuring the Cost of Privacy: A Look at the Distributional Effects of Private Bargaining. British Journal of Political Science, 46, 861–89.Google Scholar
Kucik, J. & Pelc, K. J. (2016a). Over-commitment and Backsliding in International Trade. European Journal of Political Research, 55(2), 391415.CrossRefGoogle Scholar
Kucik, J. & Pelc, K. J. (2016b). Do International Rulings Have Spillover Effects? The View from Financial Markets. World Politics, 68(4), 713–51.CrossRefGoogle Scholar
Pelc, K. J. (2009). Seeking Escape: The Use of Escape Clauses in International Trade Agreements. International Studies Quarterly, 53, 349–68.CrossRefGoogle Scholar
Pelc, K. J. (2014). The Politics of Precedent in International Law: A Social Network Application. American Political Science Review, 108(3), 547–64.Google Scholar
Pelc, K. J. (2016). Making and Bending International Rules: The Design of Exceptions and Escape Clauses in Trade Law, Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Pelc, K. J. (2017). What Explains the Low Success Rate of Investor-State Disputes? International Organization, 71(3).CrossRefGoogle Scholar
Ragosta, J., Joneja, N. & Zeldovich, M. (2003). WTO Dispute Settlement: The System Is Flawed and Must Be Fixed. The International Lawyer, 697752.
Rothschild, D. & Wolfers, J. (2010). Forecasting Elections: Voter Intentions versus Expectations, Washington, DC: Brookings Institution.Google Scholar
Schäfer, H. (2012). Can Member State Liability for the Infringement of European Law Deter National Legislators? Research Handbook on the Economics of European Union Law, 82.CrossRefGoogle Scholar
Schultz, K. A. (2001). Democracy and Coercive Diplomacy. Vol. 76, Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Simmons, B. A. (2009). Mobilizing for Human Rights: International Law in Domestic Politics, New York; Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Simmons, B. A. & Danner, A. (2010). Credible Commitments and the International Criminal Court. International Organization, 64(2).CrossRefGoogle Scholar
Trachtman, J. P. (1999). Domain of WTO Dispute Resolution. The Harvard International Law Journal, 40, 333.Google Scholar
Wippman, D. (1999). Atrocities, Deterrence, and the Limits of International Justice. Fordham International Law Journal, 23, 473.Google Scholar

Save book to Kindle

To save this book to your Kindle, first ensure coreplatform@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×