7 Politics of Investment Treaties in Developed Countries

Subject(s):

Definition of investment — Treaties, interpretation — Treaty provisions

This chapter focuses on the main factors driving investment treaty policy-making in developed countries. This can only be done based on an understanding of the changing socio-economic environment for foreign investments, and the chapter therefore provides significant historical context to the law and economics of the investment treaty regime. The chapter evaluates four potential explanations for why and how developed countries adopted investment treaties. These are: (i) the promotion of business interests; (ii) de-politicizing investment disputes; (iii) building customary international law; and (iv) using investment treaties for diplomatic and symbolic reasons. The chapter concludes by examining recent developments. These include the rise of investment treaty arbitration against developed country states themselves, which has prompted unprecedented political debate about investment treaties.