Do We Really Need Bits? Toward a Return to Contract in International Investment Law

Abstract

In contrast to arguments commonplace in the extant literature promoting bilateral investment treaties (BITs) I argue that BITs are not necessary to resolve any pressing problems of credible commitment or obsolescing bargain. I point out that investors have long had the ability to credibly commit to treat investors fairly through investment contracts. I recommend that developing countries consider forgoing BITs in favor of a regime in which foreign investors are required to bargain for special treatment.

Keywords: bilateral investment, BITs, international investment law, arbitration, investment risks, BIT substitutes