DOCTORAL DISSERTATION RESEARCH: SACRIFICING SOVEREIGNTY: EXPLAINING STATE CONSENT TO BINDING ARBITRATION WITH FOREIGN DIRECT INVESTORS

University Of North Carolina At Chapel Hill, Chapel Hill NC

Investigators

Abstract

This project examines the phenomenon of investor-state arbitration provisions in bilateral investment treaties (BITs). The project addresses two important and understudied questions. Why are states increasingly choosing to relinquish one of their fundamental sovereign rights under international law: immunity from suit by foreign direct investors before international tribunals? And does relinquishing that right actually help to attract foreign investment? The proposed project will provide one of the first systematic and theoretically informed empirical analyses of the BIT/arbitration phenomenon. In particular, the project will develop a unique dataset that systematically evaluates the relative strength of each BIT's dispute settlement and other substantive provisions. The dispute settlement measure will serve alternately as the dependent and key explanatory variable in a series of statistical models testing the project's core predictions: that weakly democratic capital importing states will tend to conclude BITs with strong pro-investor dispute settlement provisions, and that BITs with the strongest investor protection provisions will have stronger positive impacts on foreign direct investment (FDI) inflows than will BITs with weaker provisions.