Taking Local Expectations Seriously: A Fresh Start for Foreign Investment Governance?

Abstract

The international investment regime is one of the most controversial areas of international law. Although there are a number of proposals to reform this regime, most of them are centred on safeguarding states’ right to regulate. This article claims that this approach overlooks important political economy challenges. By looking at foreign investor rights through the lenses of property law and theory, this article shows that the international investment regime privileges foreign investors’ expectations to the detriment of local actors. The costs and risks of foreign investment can exceed negative externalities, as these projects can also undermine local rights and values. A successful reform, therefore, needs to take local expectations seriously.

Keywords: International Investment Law, Foreign Investment, International Economic Law, Local Communities