The Rise of Investor–State Arbitration: Politics, Law, and Unintended Consequences

Monograph by Taylor St. John (OUP).

Description of the Book

Recent criticism of investor–state arbitration has characterized it as an unaccountable, special-interest-driven threat to legitimate public policy. How did we get here? This book probes the intellectual, political, and economic forces behind the rise of investor–state arbitration. It draws on thousands of internal documents from several governments and interviews to give readers firsthand insight into the key moments that created investor–state arbitration.

The corporations and law firms that dominate investor-state arbitration today were not present at its creation. In fact, there was almost no lobbying from investors. Nor did powerful states have a strong preference for it. Nor was it created because there was evidence that it facilitates investment - there was no such evidence. International officials with peacebuilding and development aims drove the rise of investor-state arbitration.

This book puts forward a new historical institutionalist explanation to illuminate how the actions of these officials kicked off a process of gradual institutional development. While these officials anticipated many developments, including an enormous caseload from investment treaties, over time this institutional framework they created has been put to new purposes by different actors. For instance, while American officials initially saw arbitration totally separate from liberalization, later generations of American officials re-imagined it as an tool to lock in liberalization reforms. Institutions do not determine the purposes to which they may be put, and this book's analysis illustrates how unintended consequences emerge and how decisions taken in previous eras constrain and enable what can emerge in the present. This is especially evident with regard to the private–public tension in investor–state arbitration: all of the visions outlined for investor–state arbitration’s future define themselves in terms of the clash between public and private paradigms—a clash created by a small group of drafters over fifty years ago.


Table of Contents


1: International Officials and the Rise of Investor–State Arbitration: A Historical Institutionalist Account

Part I. Creating the Convention

2: Gunboats and Diplomacy: Antecedents of the ICSID Convention

3: Intergovernmental Bargaining: 'The Lowest Common Denominator Was Not Yet Low Enough'

4: Supranational Agenda-Setting: The World Bank's 'Modest Proposal'

5: Intergovernmental Deliberation and Ratification of ICSID

Part II. Eliciting State Consent

6: Layering: How Investor-State Arbitration Was Added to Investment Treaties

7: Conversion: America Embraces Investor-State Arbitration

8: Why is Exit So Hard? Positive Feedback and Institutional Persistence Conclusion


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Tags: Investment
Published Oct. 27, 2017 1:51 PM - Last modified July 21, 2020 10:55 AM