Economics and Politics of International Investment Agreements

Henrik Horn and Thomas Tangerås ()

No 2017/19, RSCAS Working Papers from European University Institute

Abstract: We analyze the optimal design and implications of international investment agreements. These are ubiquitous, potent and heavily criticized state-to-state treaties that compensate foreign investors against host country policies. Optimal agreements cause national but not global underregulation ("regulatory chill"). The incentives to form agreements and their distributional consequences depend on countries’ unilateral commitment possibilities and the direction of investment flows. Foreign investors benefit from agreements between developed countries at the expense of the rest of society, but not in the case of agreements between developed and developing countries.

Keywords: Foreign direct investment; expropriation; international investment agreements; regulatory chill. (search for similar items in EconPapers)
JEL-codes: F21 F23 F53 K33 (search for similar items in EconPapers)
Date: 2017-04
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: ECONOMICS AND POLITICS OF INTERNATIONAL INVESTMENT AGREEMENTS (2017)
Working Paper: Economics and Politics of International Investment Agreements (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:rsc:rsceui:2017/19

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