This book provides an in-depth analysis of the political risk associated with foreign investment—the risk that the host government will nationalize or otherwise interfere with alien property rights. It succinctly discusses issues such as state responsibility for investor protection, treaties protecting foreign investment, political risk insurance, the immunity of states from suit in national courts, international arbitration between states and investors, and other matters governed or affected by evolving principles of international law. It serves as a useful guide for investors, corporate counsel, government officials, and others interested in foreign investment, political risk, and expropriation litigation disputes. A primary goal of the book is to enable the investor to appreciate the risks associated with government interference in property rights, and to equip him to better choose between investment opportunities, negotiate, safeguard investments, and react effectively to the consequences of political risk. The book is written not from an academic viewpoint but rather from the perspective of assisting businesses and governments in avoiding or reacting to the conflict between interests private and public, foreign and domestic. Answers are suggested to questions such as: How can an investor assess and manage the incumbent political risk before deciding whether to invest? What can an investor do to deter manifestations of political risk once the investment has been made? How can international law be brought to bear as protection against political risk? Finally, what remedies are available if political risk materializes to the investor’s detriment? After an introduction that analyzes the role and effect of foreign direct investment on the global economy of the modern world, the text is divided into three main parts. Part I offers guidance on the assessment and pre-investment management of political risk. Part I introduces the reader to the various types of political risk and their measurement, and suggests steps the investor can take before investing to minimize political risk. These include investment structure and features such as stabilization and arbitration clauses and clauses guiding tribunals with regard to damages and interest rates. Various types of political risk insurance are also described. Part II concerns the international law framework of investment protection and political risk, including the general background international law pertaining to expropriation and state responsibility. This Part addresses the remedies available under international law to investors when a state expropriates an investor’s property or interferes with its investment, and traces the history and development of the customary international law of expropriation and investment protection. The modern international law of investment protection as embodied in multilateral and bilateral investment treaties and methods of valuation of damaged or expropriated property are also covered. Part III, focusing on dispute resolution and political risk, provides practical guidance on the procedural recourse available to investors whose investments have been expropriated or interfered with by the host state. This Part details the jurisdictional requirements for invoking investment treaty protections and also provides an overview of international arbitration procedure. Also covered in separate chapters are mediation, conciliation, and other non-litigious forms of alternative dispute resolution; and actions that an investor’s home government may take to protect the investor from host-State interference with investment. Also provided are a variety of useful appendices, e.g. bilateral investment treaties of selected countries, an OPIC insurance contract, the MIGA Contract of Guarantee, a private insurance contract, and a compilation of online resources. Extensive cross-references are employed to alert the reader of a related discussion in another chapter or part of the book.