Chapter 9: Legitimacy and Governance Challenges

The Political Economy of the Investment Treaty Regime. Oxford: Oxford University Press. (2017)

University of Cambridge Faculty of Law Research Paper No. 60/2017

82 Pages Posted: 28 Jul 2017 Last revised: 30 Nov 2017

See all articles by Jonathan Bonnitcha

Jonathan Bonnitcha

University of New South Wales

Lauge N. Skovgaard Poulsen

University College London

Michael Waibel

University of Vienna - Faculty of Law

Date Written: July 16, 2017

Abstract

Investment treaties are some of the most controversial yet least understood instruments of global economic governance. Public interest in international investment arbitration is growing, and some developed and developing countries are beginning to revisit their investment treaty policies. The Political Economy of the Investment Treaty Regime synthesizes and advances the growing literature on this subject by integrating legal, economic, and political perspectives. Based on an analysis of the substantive and procedural rights conferred by investment treaties, it asks four basic questions. What are the costs and benefits of investment treaties for investors, states, and other stakeholders? Why did developed and developing countries sign the treaties? Why should private arbitrators be allowed to review public regulations passed by states? And what is the relationship between the investment treaty regime and the broader regime complex that governs international investment? Through a concise yet comprehensive analysis this book fills in some of the many ‘blind spots’ of academics from different disciplines.

This final chapter of the book outlines the legitimacy and governance challenges facing the investment treaty regime. The first section considers the impact of investment treaties on national governance. In particular, it assesses criticisms that investment treaties unduly fetter democratic decision-making and discourage states from regulating in the public interest. The second section examines the legitimacy of investment treaty arbitration – the regime feature that has come under closest scrutiny over the last decade. It assesses debates about transparency and consistency in investment treaty arbitration, its impact on the broader investment regime complex, the selection, identity, and alleged biases of arbitrators, as well as the lack of investor obligations.

Keywords: investment treaties, international arbitration, foreign direct investment, regimes, international economic law, international business

JEL Classification: F14, F21, F23, F42, F53, F55

Suggested Citation

Bonnitcha, Jonathan and Skovgaard Poulsen, Lauge N. and Waibel, Michael, Chapter 9: Legitimacy and Governance Challenges (July 16, 2017). The Political Economy of the Investment Treaty Regime. Oxford: Oxford University Press. (2017); University of Cambridge Faculty of Law Research Paper No. 60/2017. Available at SSRN: https://ssrn.com/abstract=3003579 or http://dx.doi.org/10.2139/ssrn.3003579

Jonathan Bonnitcha

University of New South Wales ( email )

Kensington
High St
Sydney, NSW 2052
Australia

Lauge N. Skovgaard Poulsen (Contact Author)

University College London ( email )

Gower Street
London, WC1E 6BT
United Kingdom

Michael Waibel

University of Vienna - Faculty of Law ( email )

Schottenbastei 10-16
Vienna, A-1010
Austria

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