Skip to Main content Skip to Navigation
Preprints, Working Papers, ...

Pro-business arbitration with ISDS

Abstract : In this paper we investigate the Investor-State Dispute Resolution Settlement (ISDS) framework, which governs dispute resolution between foreign investors and host states in many bilateral and multilateral trade agreements. We show that ISDS delivers fair justice in a one-shot setting. In a repeated-interaction setting however, it is prone to collusion to the benefit of all parties except the host states. Three factors are determinant: First, the investors are the sole parties able to file cases; Second, arbitrators' earning prospects depend on the investors' filing cases; And finally, treaties leave substantial discretion to arbitration courts in their interpretation of treaties' provisions. We give conditions for pro-business collusion between investors and arbitrators to develop and we show how it makes it profitable for foreign investors to file high-stake claims against states in response to new environmental, social or health regulations. Further, we address regulatory chill and show how the fear of ISDS attacks can hold back welfare improving regulation in the host country. Finally, we extend the model to show how regulatory chill affect policy-making in other countries in which the investor operates with similar activities.
Document type :
Preprints, Working Papers, ...
Complete list of metadata

https://halshs.archives-ouvertes.fr/halshs-03763380
Contributor : Caroline Bauer Connect in order to contact the contributor
Submitted on : Monday, August 29, 2022 - 2:42:39 PM
Last modification on : Monday, September 19, 2022 - 12:22:57 PM

File

wp_202228_.pdf
Files produced by the author(s)

Identifiers

  • HAL Id : halshs-03763380, version 1

Collections

Citation

Bernard Caillaud, Ariane Lambert-Mogiliansky. Pro-business arbitration with ISDS. 2022. ⟨halshs-03763380⟩

Share

Metrics

Record views

954

Files downloads

7763