The Political Economy of Investment Arbitration

The Political Economy of Investment Arbitration explores how political institutions and actors in the host state of an investment contribute to the emergence of investor-state disputes, combining insights from international relations and political economy. It argues that democratic institutions in host states contribute to these disputes, as they are often motivated by distributional conflicts involving domestic interest groups. This has implications for our normative assessment of the regime and is relevant to current debates in international law and international political economy.

Format: Hardback
Length: 208 pages
Publication date: 08 September 2022
Publisher: Oxford University Press

The Political Economy of Investment Arbitration delves into the intricate relationship between political institutions and actors within the host state of an investment and the emergence of investor-state disputes. By integrating insights from international relations and political economy, this book offers two contrasting explanations for these disputes: the shifting state preferences towards foreign direct investment (FDI) or the lack of state capacity to maintain an investment-friendly environment.

The overarching conclusion of this book is that democratic institutions in host states play a significant role in fostering the emergence of investor-state disputes. Phillips Williams argues that at the core of many investor-state disputes lie highly politicized distributional conflicts involving a diverse range of domestic interest groups. These groups, driven by their interests and through various means such as voting, protests, and lobbying, exert significant pressure on states to make policy decisions that may later face legal challenges from investors. Consequently, this monograph illustrates that even in the face of the potentially high costs associated with investment arbitration, governments persist in taking measures that may harm investors in pursuit of specific policy objectives.

Moreover, these disputes are not solely the result of corruption or weak rule of law but rather stem from measures taken at the behest of broader interest groups and are closely linked to public policy concerns. This has profound implications for our normative assessment of the investment treaty regime and is of utmost relevance to ongoing debates in international law and international political economy regarding the interplay between investment treaties and domestic politics.

Weight: 476g
Dimension: 240 x 164 x 24 (mm)
ISBN-13: 9780198865940