 States Sued: Democracy, the Rule of Law, and Investor-State Dispute Settlement (ISDS)Yong Kyun Kim International Interactions, 2017, vol. 43, issue 2, 300-325 Abstract: Investor-state dispute settlement (ISDS) cases have increased dramatically in recent decades, and the institutions of investment arbitration to resolve investor-state disputes constitute the core of the modern investment regime. In this article, we seek to explain the variation in the host governments’ risk of being challenged by foreign investors before international arbitration tribunals. We argue that such risk is greatest at the intermediate level of democracy where some democratic elements such as elections are strong, but the system of rule of law remains weak. In those regimes, “regulatory risk” runs higher than in autocratic regimes as the host governments are under greater pressure for regulating matters of broad public concern. At the same time, more traditional political risk of arbitrary, discriminate, and abusive acts remains considerable at that level of democracy due to weak rule of law, exacerbating the former risk. Empirical analysis provides a good deal of support for the argument. Date: 2017 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:ginixx:v:43:y:2017:i:2:p:300-325 Ordering information: This journal article can be ordered from DOI: 10.1080/03050629.2016.1173546 Access Statistics for this article International Interactions is currently edited by Michael Colaresi and Gerald Schneider More articles in International Interactions from Taylor & Francis Journals |
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