initiation of the formal WTO dispute.<sup>20</sup> The second year of interest in Figure 1 is the “politically optimal” year, or the year by which the respondent is supposed to have implemented its policy reform following resolution of the dispute. Our rule for establishing the legal “conclusion” of a dispute (period 5 in Figure 1) is the following. Whenever the timing of the announced change in the policy is directly observed because of dispute rulings, other legal filings (e.g., mutually agreeable solutions), or revelations through other official government documents (e.g., removal of temporary trade barriers), we take _t_ = _PO_ (period 7) to be two years after this notification. This two year window accounts for the WTO’s institutional constraint that provides a “reasonable period of time” to implement policy changes after such rulings and thus for trade flows to be given time to respond.<sup>21</sup> In 84 percent of our sample, the timing of post-dispute policy change implemented by the respondent is directly observable. However, in 16 percent of disputes there is no formal announcement of the policy change or legal conclusion. In these instances, we define the dispute’s legal conclusion (period 5) to be the last legal correspondence between the two main litigants in the WTO dispute, and we take the politically optimal year _t_ = _PO_ to be three years after this period. Since it is unclear what, if any, policy changes took place in these disputes, we also report and discuss below the sensitivity of the evidence to dropping these particular observations.

Table 1 provides greater detail about the population of disputes that WTO members initiated and concluded between 1995 and 2009, and how it has been reduced to yield the sample used in our estimation exercise. First, the modeling framework described in Section 3 is not necessarily appropriate for all disputes, especially those involving alleged violations to WTO rules affecting a country’s export policies.<sup>22</sup> That eliminates 35 of the 307 disputes from consideration for the analysis. Second, we also drop disputes related to services imports or general policies that affect all imports, i.e., those that cannot be matched to any particular products under dispute. The resulting sample is 249 WTO disputes initiated and concluded between 1995 and 2009 that relate to allegations over import policies that can be matched to specific 6-digit Harmonized System (HS-06) import products.

Our estimation procedure also requires matching available disaggregated trade data for volumes and prices for the years around the policy changes taking place prior to and at the conclusion of the

> 20Bown and Reynolds (2015) provide an analysis of the trade flow data associated with products prior to the initiation of the dispute. One result of interest is that estimates of the pre-dispute levels of market access at stake and scope of products under dispute are not statistically different for the disputes triggered by policy changes relative to the disputes triggered by the failure to implement a policy change after the Uruguay Round or WTO accession.

> 21Article 21.3(c) of the WTO’s Dispute Settlement Understanding specifically makes the following suggestion: “a guideline for the arbitrator should be that the reasonable period of time to implement panel or Appellate Body recommendations should not exceed 15 months from the date of adoption of a panel or Appellate Body report. However, time may be shorter or longer, depending upon the particular circumstances.”

> 22For example, a three country model would be more appropriate to examine the litigation of WTO-inconsistent export subsidies, in which the complainant and respondent are each modeled as having exporters that compete in a common third market and which countries are assumed to have access to export policy instruments as opposed to the import tariffs assumed here. The examination of export restrictions would similarly require an alternative modeling framework that may include different assumptions on available policy instruments, and in that case the complainant would be the importer and the respondent would be the exporter of the disputed product.

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