Abstract
AbstractThere is a long-standing claim and ambition in international investment law that treaties and customary law contribute to economic development in countries hosting investment. However, this claim remains controversial and has been hotly debated among academics. The article explores how international investment law, understood as international investment agreements (IIAs) and their associated dispute settlement mechanisms, can support the right to development. It does so by analysing how rules regarding protection and flow of foreign direct investment have and can contribute to realizing the right to development and help achieve sustainable development goals. It finds that IIAs have had limited effects for promotion of investment into or restricting the policy space for least developed and low-income countries. It argues that potential effects of IIAs cannot be properly understood without taking into account other means of protecting and promoting foreign direct investment, i.e., national investment legislation and contracts. So far, national investment legislation is likely to have had more significant impact on flows of foreign direct investment and policy space of host countries than IIAs. Reforms of IIAs to increase synergies with the right to development will, therefore, have to be based on knowledge about and assessments of the dynamics between IIAs, domestic investment legislation, and investment contracts.
Highlights
There is a long-standing claim and ambition in international investment law that treaties and customary law contribute to economic development in countries hosting foreign investment
If we look closer at key features of the legislation adopted by least developed countries (LDCs), we see that sustainable development aspects have received limited attention
We have found that the legal framework for promotion and protection of foreign direct investment (FDI) relies heavily on limiting the policy space available to host countries when elaborating measures to respect, protect and fulfil the right to development (RtD) and achieve Sustainable Development Goals (SDGs)
Summary
There is a long-standing claim and ambition in international investment law that treaties and customary law contribute to economic development in countries hosting foreign investment. There have been numerous studies of whether and under what conditions IIAs increase the flow of foreign direct investment (FDI) into contracting parties. Emerging common denominators indicate that IIAs can effectively promote FDI into certain sectors depending on the protections included and circumstances of the country in question Against this background, we shall explore whether and how international investment law, understood as IIAs and their associated dispute settlement mechanisms, can support the right to development (RtD). In order to complete the picture of whether and how international investment law can support the RtD, Section 4 will briefly consider the potential for IIAs to expand the flow of FDI.
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