The Concept of the State in Investor-State Arbitration: A Social Science Perspective

Abstract

Many legal writings on investor-state dispute settlement (ISDS) consider the State primarily in its practical dimension as a respondent or treaty negotiator. International lawyers certainly work with a concept of the State, but it often consists of little more than the criteria of statehood (population, territory, government and independence) expressed in the Montevideo Convention on Rights and Duties of States. These criteria say little to nothing about how modern administrative States should or do interact with economic and political actors within their territories. Certainly, some arbitrators and treaties defer to States’ regulatory prerogatives in greater or lesser degree. But absent a consistent theory of appropriate State behavior vis-a-vis other economic actors, there is a risk that some State-society interactions that promote long-run development may also trigger treaty liability under international investment agreements in the short-term. This chapter has two goals. First, it hopes to introduce readers in the legal community to some of the ways in which social scientists study the State and various judicial processes. Second, it shows that investment arbitrators are already working with concepts of the State, even if these do not constitute full-blown theories.