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Rule-Based Dispute Resolution in International Law

This Essay examines why the United States government demanded a more rule-based dispute settlement system in the World Trade Organization (“WTO”). American support for a trade court limiting its international bargaining power is puzzling, particularly given the United States’ general resistance to international courts and obvious advantage in a negotiation-based system. Access to the United States’ market is one of the primary benefits of membership in the WTO and, by limiting access to its market, the United States can resolve trading disputes on favorable terms. Why would the United States give up this flexibility in favor of a strong international court?

This Essay addresses both the puzzle of the United States’ preference for rule-based dispute resolution and the broader implications for international law. It argues that the WTO system strengthens the President’s hand in trade policy negotiations with Congress. The United States’ preference – or more specifically, the President’s preference – for a rule-based system derives, in part, from the President’s efforts to gain greater control over trade policy at the national level. A trade court imposes an international constraint that actually increases the President’s power over lawmaking at home. The Essay then turns to the broader implications for international law. It shows how domestic actors, such as the President, may use international law to try to change domestic politics. International law influences state interests by shifting bargaining power among different players within the government and thereby changing the outcome of domestic politics.

Chevron Step Zero

The most famous case in administrative law, Chevron U.S.A. v. Natural Resources Defense Council, Inc., has come to be seen as a counter-Marbury, or even a McCulloch v. Maryland, for the administrative state. But in the last period, new debates have broken out over Chevron Step Zero — the initial inquiry into whether Chevron applies at all. These debates are the contemporary location of a longstanding dispute between Justice Scalia and Justice Breyer over whether Chevron is a revolutionary decision, establishing an across-the-board rule, or instead a mere synthesis of preexisting law, inviting a case-by-case inquiry into congressional instructions on the deference question. In the last decade, Justice Breyer’s case-by-case view has enjoyed significant victories. Two trilogies of cases — one explicitly directed to the Step Zero question, another implicitly so directed — suggest that the Chevron framework may not apply (a) to agency decisions not preceded by formal procedures and (b) to agency decisions that involve large-scale questions about agency authority. Both of these trilogies threaten to unsettle the Chevron framework, and to do so in a way that produces unnecessary complexity for judicial review and damaging results for regulatory law. These problems can be reduced through two steps. First, courts should adopt a broader understanding of Chevron’s scope. Second, courts should acknowledge that the argument for Chevron deference is strengthened, not weakened, when major questions of statutory structure are involved. 

Information Markets: Using Market Predictions to Make Today’s Decisions

Presidential betting markets predict election outcomes more
accurately than polls because of their ability to effectively aggregate information. Empirical research and theory indicates that the result extends to other contexts. Betting markets, more formally called information markets, provide accurate predictions about future product sales, box office receipts, and other future events. Moreover, market predictions generally outperform other prediction mechanisms. This paper argues that empirical research and theory indicates that we should use information markets’ predictive power to make administrative decisions. In addition, it presents a model information market designed to help policy makers evaluate policies prior to their implementation by providing policy makers information about the policies’ effects in the form of market predictions. To design such a market, it is necessary to determine how the market should pay off bettors when the agency does not implement a policy because the market predicts it will have an adverse effect. The problem is that bets pay off based on the outcome of an event, but when the policy makers decide not to implement a policy, the policy has no effect and thus it is unclear how to compensate bettors. This paper shows that through clever market design it is possible to return the market price of a bet, prior to an agency’s decision not to implement the policy on which the bet depends, without fear of market manipulation. Consequently, even in cases where using market predictions to make administrative decisions appears problematic, it is possible.

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