Today, investor-state arbitration embodies the worst fears of those concerned about runaway globalization - a far cry from its framers' intentions. Why did governments create a special legal system in which foreign investors can bring cases directly against states?
This book takes readers through the key decisions that created investor-state arbitration, drawing on internal documents from several governments and extensive interviews to illustrate the politics behind this new legal system.
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. Institutions do not determine the purposes to which they may be put, and this book's analysis illustrates how unintended consequences emerge and why institutions persist regardless.
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