The creation of the DSU

This project focuses on the creation of the Dispute Settlement Understanding (DSU) developed during the Uruguay Round negotiations. This agreement produced one of the most legalised systems of dispute settlement in international politics. There are few contributions in the field of international relations that provide a theory-based explanation to the puzzle of delegating adjudicative power to a third party (the Appellate Body) coupled with a high degree of ‘bindingness’ of rulings. The existing evidence presented is far from conclusive as to why the contracting parties accepted this international court-like body. This project takes a novel look at the design of the DSU within a single case-study approach. Based on interviews with directly involved negotiators from the leading contracting parties and various Secretariat officials, this project puts forward a principal-agent (PA) explanation as to how the negotiating agents have dealt with constraints from home and what has influenced their expectations and behaviour in the bargaining process over the design. The contribution of this project is two-fold: shed more empirical light on the important process of designing a powerful international ‘court’ and testing hypotheses derived from the PA literature in relation to WTO negotiations.