Global Regime on Foreign Investment: Challenges and Developments

Foroughiniya, Hossein

Global Regime on Foreign Investment: Challenges and Developments

Author

Hossein Foroughiniya

Abstract

Although the 3000 international investment treaties concluded since the end of World War II are separate and distinct international legal instruments, they constitute, as a group, an emerging global regime for investment. Drawing on regime theory from the field of international relations. While having all the characteristics of other international regimes, the investment regime also has three unique features: it has been bilaterally, rather than multilaterally, constructed: it decentralizes and privatizes decision-making processes; and it is not based on a multilateral international organization. All of these features have significant consequences for the functionality and sustainability of the regime. The regime also faces four major challenges: (1) disappointing regime results; (2) perceived defective decision-making process and unjustified constraints on national sovereignty; (3) divergence of participant expectations; and (4) the impact of national and global economic crises. On the other hand, certain other factors tend to give the regime a sticky quality that makes the departure of members difficult. Nonetheless, the international investment regime will require wise management and flexible leadership in the future if it is to withstand these challenges and achieve its potential. This article examines the elements of the international investment regime, the reasons for its development, the goals that it pursues, and the challenges that it faces.

Keywords

bilateral investment treaties

international investment regime

international organization

trade international law

Principles

norms

rules

decision making processes

economic liberalization

enforcement mechanisms

international arbitration

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