Accountability in a Regime Complex: Charting Policy Reforms for Investor-State Dispute Settlement

Abstract

Investor-state dispute settlement is a prime example of a regime complex, with thousands of bilateral treaties laying out standards of treatment, hundreds of ad hoc tribunals issuing interpretations, and a patchwork of multilateral treaties and national laws establishing enforcement provisions. While some states have expressed negotiators' remorse, the complexity of the system makes re-contracting difficult. This paper leverages data from original interviews with investment arbitrators to identify aspects of the system that are problematic from normative efficiency and fairness perspectives. It then proposes a set of sequenced policy reforms that could address these problems in the next U.S. administration.

Keywords: Investor-State Dispute Settlement, Regime Complex, Adjudication, Legislation

JEL Classification: F53, F55