Predictability versus Flexibility: Secrecy in International Investment Arbitration

World Politics. 1-41, 2016

41 Pages Posted: 2 May 2014 Last revised: 26 Jan 2018

See all articles by Emilie Marie Hafner-Burton

Emilie Marie Hafner-Burton

UCSD School of Global Policy and Strategy

Zachary Steinert-Threlkeld

University of California, Los Angeles (UCLA) - Luskin School of Public Affairs

David G. Victor

UC San Diego, School of Global Policy and Strategy

Date Written: 2016

Abstract

Transparency can have a large impact on whether the work of international legal institutions such as tribunals is seen as legitimate as well as the ability of governments to manage the domestic audience costs of adjusting to international norms. International investment arbitration offers a special opportunity to study transparency because nearly always the parties to international investment disputes have the choice of whether to reveal the final results of arbitration to the public. Working with a new statistical database of disputes at the world’s largest investor-state arbitral institution — the World Bank’s International Centre for the Settlement of Investment Disputes (ICSID) — this paper examines the incentives of individual firms as well as governments to keep the details of their disputes secret. Secrecy prevails in cases where the incentives for privacy are strongest: over investments that have long time horizons where costly compromises by investors and the host state are essential to keeping the project financially viable and when any party has reason to expect ex ante that it will lose. This research has sobering implications for scholarship that has identified transparency as an essential condition for institutional legitimacy and effectiveness because the public is least informed about arbitral outcomes in precisely those cases where broad public interests are likely to be most affected.

Keywords: Investment, Arbitration, Transparency, Secrecy, World Bank, ICSID, Industry, Reform

Suggested Citation

Hafner-Burton, Emilie Marie and Steinert-Threlkeld, Zachary and Victor, David G., Predictability versus Flexibility: Secrecy in International Investment Arbitration (2016). World Politics. 1-41, 2016. Available at SSRN: https://ssrn.com/abstract=2431522 or http://dx.doi.org/10.2139/ssrn.2431522

Emilie Marie Hafner-Burton (Contact Author)

UCSD School of Global Policy and Strategy ( email )

9500 Gilman Drive
La Jolla, CA 92093-0519
United States

HOME PAGE: http://gps.ucsd.edu/ehafner/

Zachary Steinert-Threlkeld

University of California, Los Angeles (UCLA) - Luskin School of Public Affairs ( email )

3250 Public Affairs Building
Los Angeles, CA 90095-1656
United States

David G. Victor

UC San Diego, School of Global Policy and Strategy ( email )

9500 Gilman Drive
La Jolla, CA 92093-0519
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
97
Abstract Views
1,107
rank
270,496
PlumX Metrics