This paper analyzes the developmental trade-offs involved in multilateral versus regional-bilateral strategies of integration into the international economy. I contrast the regulations that guide policy in the areas of trade, investment, and intellectual property in the World Trade Organization (WTO) and in regional-bilateral agreements between the US and developing countries. Both strategies of integration feature similar trade-offs, in that developing countries gain increased market access and opportunities for specialization in exchange for diminished space for use of industrial policy instruments to create new productive capacities. However, the trade-offs are intensified in the case of regional-bilateral agreements: countries receive more market access, but in exchange make significantly deeper concessions regarding the management of inward investment and intellectual policy. I argue that countries whose integration into the international economy is guided by their obligations as members of ...

https://www.jstor.org/stable/pdfplus/25124050.pdf

Exchanging development for market access? Deep integration and industrial policy under multilateral and regional-bilateral trade agreements

Heuristics have long been associated with problems of bias and framing error, often on the basis of simulation and laboratory studies. In this field study of a high-stakes strategic decision, we explore an alternative view that heuristics may serve as powerful cognitive tools that enable, rather than limit, decision making in dynamic and uncertain environments. We examine the cognitive efforts of senior decision makers of an inexperienced multinational, as they assessed a potential acquisition in a politically hazardous African country. They applied a diversity of heuristics, some with clear building block rules, to build small world representations of this very uncertain strategic context. More expert individuals drew on experiential learning to build richer representations of the political hazard environment

https://minerva-access.unimelb.edu.au/bitstream/handle/11343/145378/Maitland & Sammartino (SMJ Forthcoming) Decision-making and Uncertainty (Academia version 2).pdf

Decision making and uncertainty: The role of heuristics and experience in assessing a politically hazardous environment

The regime for international investment is extraordinary in public international law and controversial in many regions of the world. This article explores two aspects of this set of rules: its decentralization and the unusual powers it gives to private actors to invoke dispute settlement. Decentralization has contributed to a competitive environment for ratification of bilateral investment treaties (bit s) and has elevated the importance of dyadic bargaining power in the formation of the regime. Governments of developing countries are more likely to enter into bit s and tie their hands more tightly when they are in a weak bargaining position, which in turn is associated with economic downturns of the domestic economy. Once committed, investors have sued governments with surprising regularity, arguably contributing disproportionately to legal awards that favor the private corporate actors who have the power to convene the dispute settlement system. States have begun to push back, revising their obligations and attempting to annul arbitral awards. One of the conclusions is that it is important not only to consider whether bit s attract capital—which has been the focus of nearly all the empirical research on bit effects—but also to investigate the governance consequences of the international investment regime generally.

https://www.cambridge.org/core/services/aop-cambridge-core/content/view/S0043887113000312

Bargaining over BITs, Arbitrating Awards: The Regime for Protection and Promotion of International Investment

This paper investigates the creation and consequences of private regulation in global food governance. It points to the power to govern and the authority to govern as the two crucial conditions for the emergence and diffusion of private food regulation. More specifically, the paper argues that the power to govern is a function of the structural power of agrifood corporations, particularly retail food corporations in our case. The authority to govern is a function of the perceived legitimacy of retail food corporations as political actors. By linking power and authority to the material and ideational structures existing in the global political economy of food, this paper analyses the processes that serve to create, maintain and reproduce private regulation in food governance. With its analysis, the paper aims to contribute to the theoretical and empirical debates on private authority, private regulation and the challenges for sustainability in the global food system.

/pdf/the-causes-and-consequences-of-private-food-governance-56nzhds65s.pdf

The Causes and Consequences of Private Food Governance

Using the international investment regime as its point of departure, the article applies notions of bounded rationality to the study of economic diplomacy. Through a multimethod approach, it shows that developing countries often ignored the risks of bilateral investment treaties (bits) until they themselves became subject to an investment treaty claim. Thus the behavior of developing country governments with regard to the international investment regime is consistent with that routinely observed for individuals in experiments and field studies: they tend to ignore high-impact, low-probability risks if they cannot bring specific “vivid” instances to mind.

/pdf/when-the-claim-hits-bilateral-investment-treaties-and-es09trcmsh.pdf

When the Claim Hits: Bilateral Investment Treaties and Bounded Rational Learning

The article outlines a simple thesis: that international investment arbitration – pursuant to regional and bilateral investment treaties – offers the clearest example of global administrative law, strictly construed, yet to have emerged. We present this thesis by explicating four key features of investment treaties: they permit investor claims against the state without exhausting local remedies; they allow claims for damages; they allow investors to directly seek enforcement of awards before domestic courts; and they facilitate forum-shopping. Our argument is that, owing to this unique conjunction of features, the regulatory conduct of states is, to an unusual extent, subject to control through compulsory international adjudication. Having highlighted these features, we then claim that investment arbitration is best analogized to domestic administrative law rather than to international commercial arbitration, especially since investment arbitration engages disputes arising from the exercise of public authority by the state as opposed to private acts of the state. Further, we claim that the linkages between investment arbitration and domestic legal systems are more direct and more closely integrated than other forms of international adjudication in the public sphere. For these reasons, we argue that the emerging regime of investment arbitration is to be understood as constituting an important and powerful manifestation of global administrative law.

/pdf/investment-treaty-arbitration-as-a-species-of-global-tmbz0q1mni.pdf

Investment Treaty Arbitration as a Species of Global Administrative Law

1. Introduction 2. Background 3. Individualization 4. Scope and Substance 5. Approaches and Interpretation 6. From Contract to Governing Arrangement 7. Conclusion

Investment Treaty Arbitration and Public Law

Conventionally, investors could not sue states directly under international law and arbitration tribunals did not have general jurisdiction over international investment disputes. This has changed, especially since the early 1990s, with the emergence of an international system of investor protection that combines investor-state arbitration and broad standards of investor protection. The system elevates the legal status of investors (but not other individuals) in international law by allowing them to make international claims for damages against host states. Although the system depends on state authority for its establishment and ongoing effectiveness, the system adopts private authority as a method of transnational governance by permitting private investors to make claims and by giving private arbitrators the power to resolve those claims. This provides significant advantages to multinational enterprises at the expense of governmental flexibility in both capital-importing and capital-exporting states, as revealed by the recent explosion of investor claims. This article examines the legal architecture of the system in order to demonstrate how it expands private authority in the context of transnational governance.

Private authority and transnational governance: the contours of the international system of investor protection

The study examines arbitrator behaviour in the uniquely context of investment treaty arbitration. It employs the method of content analysis to test hypotheses of systemic bias in the resolution of jurisdictional issues in investment treaty law. Unlike earlier studies, the study examines trends in legal interpretation instead of case outcomes and finds statistically significant evidence that arbitrators favour (1) the position of claimants over respondent states and (2) the position of claimants from major Western capital-exporting states over claimants from other states. There is a range of possible explanations for the results and further inferences are required to connect the observed trends to rationales for systemic bias. The key finding is that the observed trends exist and that they are unlikely to be explained by chance. This gives tentative empirical evidence of cause for concern about the use of arbitration in this context.

Arbitrator Behaviour in Asymmetrical Adjudication: An Empirical Study of Investment Treaty Arbitration

The study examines arbitrator behaviour in the unique context of investment treaty arbitration. It employs the method of content analysis to test hypotheses of systemic bias in the resolution of jurisdictional issues in investment treaty law. Unlike earlier studies, the study examines trends in legal interpretation instead of case outcomes and finds statistically significant evidence that arbitrators favour: (1) the position of claimants over respondent states and (2) the position of claimants from major Western capital-exporting states over claimants from other states. There is a range of possible explanations for the results and further inferences are required to connect the observed trends to rationales for systemic bias. The key finding is that the observed trends exist and that they are unlikely to be explained by chance. This gives tentative empirical evidence of cause for concern about the use of arbitration in this context.

/pdf/arbitrator-behaviour-in-asymmetrical-adjudication-an-1tujm6jrrv.pdf

Gus Van Harten

Papers

Investment Treaty Arbitration as a Species of Global Administrative Law

Investment Treaty Arbitration and Public Law

Private authority and transnational governance: the contours of the international system of investor protection

Arbitrator Behaviour in Asymmetrical Adjudication: An Empirical Study of Investment Treaty Arbitration

Arbitrator Behaviour in Asymmetrical Adjudication: An Empirical Study of Investment Treaty Arbitration