What affects a country's decision of whether to formally engage in a trade dispute directly related to its exporting interests? This article empirically examines determinants of affected country participation decisions in formal trade litigation arising under the World Trade Organization (wto) between 1995 and 2000. It investigates determinants of nonparticipation and examines whether the incentives generated by the system's rules and procedures discourage active engagement in dispute

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... by developing country members in particular. Though the size of exports at stake is found to be an important economic determinant affecting the decision to participate in challenges to a wto-inconsistent policy, the evidence also shows that measures of a country's retaliatory and legal capacity as well as its international political economy relationships matter. These results are consistent with the hypothesis of an implicit "institutional bias" generated by the system's rules and incentives that particularly affects developing economy participation in dispute settlement. The basic rules and procedures of dispute settlement under the World Trade Organization (WTO) are the same for all member countries. Nevertheless, there is substantial concern that the trading interests of certain types of members, such as small or developing economies, may be underrepresented in dispute settlement activity. A bias in participation activity may stem from the current system of selfrepresentation requiring that countries have sufficient resources to both monitor and recognize relevant WTO violations and to fund legal proceedings in cases in which their rights have been violated. Furthermore, the self-enforcing nature of the system requires that complainant countries have the retaliatory capacity to threaten