{ Foreign Aid and Retaliation in the WTO Krogh Seminar – Final Research Presentation Zachary Kay, Matthew Quallen 1

The Realist Critique  Anarchic international system  Great powers create and manipulate international institutions (Dreher et. al. 2009, Faye and Niehaus 2011) Power and International Institutions 2

 Will the realist paradigm control in the WTO? Our Case: the WTO 3

 “Power Hypothesis” (Guzman, Simmons) Strong states muscle out weaker ones? (methodological deficiencies)  Retaliation in the Literature (Davis, Bermeo) 15-20% of Cases  Foreign aid as a political tool (Morgenthau; Lim and Vreeland; Lawrimore and Varghese) Aid to control international institutions? State of the Literature 4

 We hypothesize that the United States will reduce bilateral official development assistance to states that file or join suits against it in the WTO Hypothesis 5

 Our Data -WTO Dispute Settlement Gateway -Vreeland et. Al  Independent variable Dichotomous Indicator  Dependent variable American ODA Data 6

Preliminary Result US ODA to states that file against it (1) and those that do not (0) This seems to support our original hypothesis 7

 Normalization We take logs of especially skewed variables  Controls Taking baselines from Vreeland we control for: imports, exports, and total trade flow with the US; Pariahs; War; GDP per capita; Democracy; US military assistance (arms aid)  Fixed-Effects We also control for country fixed-effects  Time lagged We lag and lead our independent variable to accommodate the lengthy causal mechanism Methods 8

Normalization US Official Development Assistance Raw Data Natural Log *What effect will this and the introduction of our controls have on our results? 9

Results 10

 No significant support for our hypothesis  Dispute Settlement as a two-level game  WTO Legitimacy Conclusions 11