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Dear colleagues,
We would like to draw your attention to a scoping study which provides an overview and assessment of existing evidence of investment treaties’ impacts. The focus is on the costs and benefits of investment treaties from the perspective of developing countries.
Based on a review of academic literature on foreign direct investment (FDI) our study concludes that investment treaties probably do lead to a modest increase in some types of FDI to developing countries. However, it is difficult to consistently identify this effect or to pinpoint the relevant elements of treaties that cause these impacts. There is also no clear evidence of other supposed benefits of investment treaties, such as facilitating domestic reforms, promoting the rule of law or depoliticizing investment disputes.
Assessing the costs of investment treaties is also challenging. For example, there is evidence that investment treaties have significant distributive impacts, in so far as states have been required to pay compensation to foreign investors. However, there has been little research on investment treaties’ other distributive impacts—notably, their impact on investor–state bargaining in negotiations to settle investment disputes.
When weighing all the benefits and costs of investment treaties against each other, there is insufficient evidence to come to any overall conclusion about the net effect of investment treaties for developing countries.
For more details, please read "Assessing the Impacts of Investment Treaties: Overview of the evidence" by IISD Associate Jonathan Bonnitcha.
We hope you find it useful.
Sincerely,
Nathalie Bernasconi
Group Director, Economic Law and Policy Program
IISD
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