Investor-State vs. State-State Dispute Settlement
Henrik Horn
No 1248, Working Paper Series from Research Institute of Industrial Economics
Abstract:
International investment agreements have provoked intense criticism in the policy debate during recent years. Particularly contentious has been their “ISDS” mechanisms, which enable investors to bring disputes against host countries. This paper examines whether host countries would be better off with state-state dispute settlement (SSDS), as often alleged, assuming that SSDS cause political/diplomatic arbitration costs that are not present with ISDS. Two separate reasons why host countries might benefit from SSDS are identified, but neither provides a convincing argument for host countries to move to SSDS. The paper concludes that host countries should reduce the stringency of their agreements, rather than introduce imperfections in the dispute settlement systems to reduce their bite.
Keywords: ISDS; Expropriation; International investment agreements; Regulatory chill (search for similar items in EconPapers)
JEL-codes: F21 F23 F53 K33 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2018-11-14, Revised 2019-02-20
New Economics Papers: this item is included in nep-int
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Working Paper: Investor-State vs. State-State Dispute Settlement (2020) 
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:1248
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