Once Bitten, Twice Shy? Investment Disputes, State Sovereignty, and Change in Treaty Design

Alexander Thompson, Tomer Broude, Yoram Z. Haftel

Research output: Contribution to journalArticlepeer-review

45 Scopus citations

Abstract

More than 3,000 international investment agreements (IIAs) provide foreign investors with substantive protections in host states and access to binding investor-state dispute settlement (ISDS). In recent years, states increasingly have sought to change their treaty commitments through the practices of renegotiation and termination, so far affecting about 300 IIAs. The received wisdom is that this development reflects a backlash against the regime and an attempt by governments to reclaim sovereignty, consistent with broader antiglobalization trends. Using new data on the degree to which IIA provisions restrict state regulatory space (SRS), we provide the first systematic investigation into the effect of ISDS experiences on state decisions to adjust their treaties. The empirical analysis indicates that exposure to investment claims leads either to the renegotiation of IIAs in the direction of greater SRS or to their termination. This effect varies, however, with the nature of involvement in ISDS and with respect to different treaty provisions.

Original languageAmerican English
Pages (from-to)859-880
Number of pages22
JournalInternational Organization
Volume73
Issue number4
DOIs
StatePublished - 1 Sep 2019

Bibliographical note

Publisher Copyright:
© Copyright 2019 The IO Foundation.

Keywords

  • International investment agreements
  • institutional design
  • international institutions
  • international law
  • international political economy
  • investor-state dispute settlement
  • treaty renegotiation and termination

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