Individuals and the microfoundations of the compliance process: affect and ISDS

Daniel Peat

Journal of International Economic Law, 2025, vol. 28, issue 3, 404-424

Abstract: Evidence from the behavioural social sciences suggests that individuals rarely decide according to the dictates of rational choice: their decisions are shaped by experiences, emotions, and cognitive heuristics and biases. But how should international lawyers explore whether and how such influences play a role in compliance decision-making? To respond to this question, this article looks at what happens if we talk to those involved in the compliance decision-making process. It reports the findings from 25 interviews conducted with individuals involved in compliance with awards of investor–state dispute settlement (ISDS) tribunals in three countries. From these data emerge a view of the dispute settlement process that is shaped by feelings of unfairness, perceptions of institutional bias, and enmity towards investors and the law firms that represent them. Compliance theories in the existing literature largely focus on a ‘snapshot’ approach to understanding compliance, where the material and normative influences that directly impact one particular compliance decision are considered. Drawing on the political science concept of affective intelligence, the article argues that we should reconceptualize compliance decision-making as one of ‘emotional appraisal’, leading us to cast the net wider to understand the influences on compliance behaviour.

Date: 2025
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