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      Bargaining over BITs, Arbitrating Awards: The Regime for Protection and Promotion of International Investment

      World Politics
      Cambridge University Press (CUP)

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          Abstract

          The regime for international investment is extraordinary in public international law and controversial in many regions of the world. This article explores two aspects of this set of rules: its decentralization and the unusual powers it gives to private actors to invoke dispute settlement. Decentralization has contributed to a competitive environment for ratification of bilateral investment treaties (BITs) and has elevated the importance of dyadic bargaining power in the formation of the regime. Governments of developing countries are more likely to enter into BITs and tie their hands more tightly when they are in a weak bargaining position, which in turn is associated with economic downturns of the domestic economy. Once committed, investors have sued governments with surprising regularity, arguably contributing disproportionately to legal awards that favor the private corporate actors who have the power to convene the dispute settlement system. States have begun to push back, revising their obligations and attempting to annul arbitral awards. One of the conclusions is that it is important not only to consider whether BITs attract capital—which has been the focus of nearly all the empirical research on BIT effects—but also to investigate the governance consequences of the international investment regime generally.

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          Author and article information

          Journal
          applab
          World Politics
          World Pol.
          Cambridge University Press (CUP)
          0043-8871
          1086-3338
          January 2014
          December 29 2013
          : 66
          : 01
          : 12-46
          Article
          10.1017/S0043887113000312
          1712ae9e-bbd0-4aa5-9b96-d864f8b342e1
          © 2013

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