International Investment Law in the Shadow of Populism: Between Redomestication and Liberalism Re‐Embedded

Georgetown University Law Center Research Paper No. 2023/21

Politics and Governance, Vol. 11, Issue 1, 2023, Pp. 203–213.

(2023). Georgetown Law Faculty Publications and Other Works. 2510.

12 Pages Posted: 18 May 2023 Last revised: 4 Mar 2024

See all articles by Alvaro Santos

Alvaro Santos

Georgetown University Law Center

Date Written: May 17, 2023

Abstract

The international investment regime is in crisis, nowhere more so than in regard to the investor–state dispute settlement system. While several developing countries have been critical of the system for some time, rich countries like the US and EU states—once the principal promoters of this regime—are now acknowledging problems and advancing reforms. This change of position has been fueled by the mobilization of civil society and the emergence of domestic populist movements on both the right and the left, reflecting widespread discontent with the past three decades of neoliberal globalization and its effects on job losses, lower wages, and increasing inequality. This article argues that this shift has opened up a unique opportunity for developing countries that want reform, as there is less pressure (real or imagined) from rich countries to continue with an old model that no longer serves. Two paths present a possible way forward: (a) Participating countries can disengage from investor–state dispute settlement and opt for the redomestication of international investment law, rekindling the Calvo doctrine, or (b) they can follow John G. Ruggie’s “embedded liberalism” to re-embed the international investment regime with values and social objectives that are now deemed politically indispensable. This article explores each of these paths, with a particular focus on Latin America. It argues that although populism creates pressures to change or abandon the regime, in developing countries it also generates constraints that may prolong the status quo.

Keywords: Calvo doctrine; embedded liberalism; foreign direct investment; ISDS reform; international investment law; Latin America; neoliberalism; populism; redomestication

JEL Classification: K00, K33

Suggested Citation

Santos, Alvaro, International Investment Law in the Shadow of Populism: Between Redomestication and Liberalism Re‐Embedded (May 17, 2023). Georgetown University Law Center Research Paper No. 2023/21, Politics and Governance, Vol. 11, Issue 1, 2023, Pp. 203–213., (2023). Georgetown Law Faculty Publications and Other Works. 2510., Available at SSRN: https://ssrn.com/abstract=4451643

Alvaro Santos (Contact Author)

Georgetown University Law Center ( email )

600 New Jersey Av. NW
Washington, DC 20001
United States
202-662-9542 (Phone)

HOME PAGE: http://www.law.georgetown.edu/faculty/santos-alvaro.cfm

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