Abstract
ABSTRACT With more than 3000 international investment agreements (IIAs) worldwide, states negotiate similar agreements multiple times with numerous partners. Accordingly, many states have developed template agreements known as ‘Model bilateral investment treaties (BITs)’. Nevertheless, concluded IIAs commonly deviate from the corresponding Model BITs, albeit to varying degrees. Investigating this variation, we examine the impact of Model Countries and their Partner Countries’ investor–state dispute settlement (ISDS) experience. Specifically, we argue that the Model Country adopts changes sought by the Partner Country during the negotiation process in order to accommodate the latter’s preferences, which were shaped by lessons learned from ISDS cases. Empirically, we introduce novel measures of divergence between Model BITs and IIAs, based on the concept and scheme of state regulatory space, with respect to several key aspects of investment rules. Coding a large number of Model BITs and IIAs on these variables and controlling for a host of alternative explanations, we find that the higher number of investment claims filed against the Partner Country, but not the Model Country, is associated with greater divergence between the Model Country’s Model BITs and its IIAs. This effect is especially noticeable with respect to important substantive investment rules.
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