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Bilateral Investment Treaties And Domestic Institutional Reform, Richard C. Chen
Bilateral Investment Treaties And Domestic Institutional Reform, Richard C. Chen
Faculty Publications
The bilateral investment treaties (BITs) signed between developed and developing countries are supposed to increase the flow of investment from the former to the latter. But the evidence indicates that the existing approach of guaranteeing special protections for foreign investors has only a modest impact on luring their dollars. At the same time they are failing to produce meaningful benefits, these treaty commitments create substantial costs for the host states that make them, exposing them to liability and constraining their regulatory authority. Given this state of imbalance, the time seems ripe for a new approach, but existing proposals for revising …
Efficient Contracting Between Foreign Investors And Host States: Evidence From Stabilization Clauses, Sam F. Halabi
Efficient Contracting Between Foreign Investors And Host States: Evidence From Stabilization Clauses, Sam F. Halabi
Faculty Publications
Bilateral investment treaties are agreements between sovereign states that give broad protections to investors and investments made within the jurisdiction of the other state. The prevailing view in the academy and practice is that developing countries sign bilateral investment treaties in order to reassure investors from developed states that their investments will be safe from changes in domestic law. Without these “credible commitments,” investors would be deterred from making investments, depriving developing countries of foreign capital. This Article disputes that view by demonstrating that foreign investors and host states effectively contract around the risk of changes in the law. This …