The Urban-Rural Divide: Spatial Inequalities and Backlash in the Investment Treaty Regime

Abstract

A growing literature in international law has examined the backlash against international institutions and norms and its links with the rise of nationalist parties and populism. Some of this backlash have been said to originate with populations in small towns and rural areas socioeconomically “left-behind” by economic globalization. These developments have made salient the growing economic and political polarization between urban and non-urban areas. Nevertheless, this urban- rural divide and its implications for international law have only started to be acknowledged. Aligned with these concerns, this article adopts the urban-rural divide as a geographical scale or frame to suggest a new perspective on the investment treaty regime, its backlash and reform. Outside of the particularly virulent nature of its backlash, the regime’s context provides fertile ground for this frame: it is structured so that urban actors principally located in global or capital cities, such as multinational enterprises, global law firms, or national executive branches, make decisions about foreign investment projects that are often located and impact non-urban areas and populations. As this article contends, this context points to the regime’s potential to impact (and address) through geographical affinities the global growth of political and economic polarization between urban and nonurban areas. The impact of these urban decisions on non-urban areas has so far principally been examined through frames that emphasize impact in terms of the “environment” or “local communities” together with calls for reforms to the regime by allocating more policy space for States. An “urban-rural” frame centers additional impacts in terms of non-urban public interest, local participation, and the distribution of resources, and queries the ability of domestic policies alone to respond to them in the pursuit of socially and economic inclusive investment.