What explains investor-state arbitration clauses in domestic investment laws? The influence of World Bank technical assistance

PluriCourts Lunch Seminar with Tarald Laudal Berge.


Out of 125 countries with domestic investment laws, 68 mention investor-state arbitration, and at least 40 provide consent to this form of arbitration – that is, they give foreign investors the right to bypass national courts and bring claims directly to arbitration. What explains this variation, and why do any governments include investor-state arbitration in their domestic legislation? To explain this variation, we build on literature about the analytic institutions of international organizations. We argue that IO analytic institutions framed arbitration references as “international best practice” and technical assistance carried this framing to governments. Specifically, we argue that governments who receive technical assistance from the World Bank’s Foreign Investment Advisory Service are more likely to include arbitration in their domestic laws. In our analysis, we apply a mixed methods research design. We first use event history analysis and find that receiving World Bank technical assistance is an exceptionally strong predictor of domestic investment laws with arbitration. Then we examine how the mechanism works in a case: Kyrgyz Republic’s 2003 law. We conclude that templates defined by IO analytic institutions are influential, but not fully determinative – domestic actors, politics, and procedures still matter.  


PluriCourt Seminars are a forum for pluridisciplinary discussion of core issues relating to international courts and tribunals. PluriCourts scholars or invited speakers present new and ongoing research or comment on current questions. The seminars are open to everyone.

Published Feb. 18, 2019 2:11 PM - Last modified Oct. 16, 2020 10:35 AM