Despite suggestions that international investment disputes impose a chilling effect on governments’ autonomy to set regulatory policies, we lack empirical confirmation of the phenomenon and what explains its heterogeneity across countries. Using a novel dataset of nine anti-smoking regulations in ninety-two countries from 1973 to 2016, I confirm the presence of the chilling effect, but also its boundaries. I show that countries have been significantly slower in implementing two anti-smoking policies formally challenged under investment law, while the adoption of seven undisputed regulations in this issue area continued unimpeded. Qualitative evidence from respondent and third-party governments confirm the policy-specificity of the chilling effect and show that both developed and developing countries were affected by the chill, albeit differently. By providing the first empirical confirmation of a regulatory chill and by defining its limited scope in one of the most high-profiled international investment disputes to date, my findings indicate that, even though multinational corporations can constrain state sovereignty, their effects are not necessarily expansive or indefinite.

International investment law provides a means for states to mitigate political risks that foreign investors face inside their borders. Its status quo includes thousands of international investment agreements (IIAs) and Investor–State Dispute Settlement (ISDS), a dispute resolution mechanism in which foreign, private investors sue host states in ad hoc international tribunals in pursuit of monetary compensation for property rights violations. In this review, we survey the vast contemporary literature on this regime to evidence the ways in which scholars have challenged the purported original goals of international investment law and its distributional consequences. In light of this literature's accomplishments, we highlight opportunities for a refocusing of international relations scholars’ research agenda on dynamics of continuity and change in the regime. The status quo in international investment law is fragile, and, in our view, the regime is on the brink of a major shift toward prioritizing state sovereignty well above political risk mitigation. Expected final online publication date for the Annual Review of Political Science, Volume 25 is May 2022. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.

Businessmen support Amidst the turmoil: the second YeAr of BolsonAro's presidencY in BrAzilApoyo de los empresarios en medio la agitación: el segundo año de la presidencia de Bolsonaro en Brasil

It is fairly well-known that proper time series analysis requires that estimated equations be balanced. Numerous scholars mistake this to mean that one cannot mix orders of integration. Previous studies have clarified the distinction between equation balance and having different orders of integration, and shown that mixing orders of integration does not increase the risk of type I error when using the general error correction/autoregressive distributed lag (GECM/ADL) models, that is, so long as equations are balanced (and other modeling assumptions are met). This paper builds on that research to assess the consequences for type II error when employing those models. Specifically, we consider cases where a true relationship exists, the left- and right-hand sides of the equation mix orders of integration, and the equation still is balanced. Using the asymptotic case, we find that the different orders of integration do not preclude identification of the true relationship using the GECM/ADL. We then highlight that estimation is trickier in practice, over finite time, as data sometimes do not reveal the underlying process. But, simulations show that even in these cases, researchers will typically draw accurate inferences as long as they select their models based on the observed characteristics of the data and test to be sure that standard model assumptions are met. We conclude by considering the implications for researchers analyzing or conducting simulations with time series data.

That economic integration constrains state sovereignty has been a longstanding concern and the subject of much study. We assess the validity of this concern in the context of two very particular components of contemporary economic globalization: global value chain (GVC) integration and Investor–State Dispute Settlement (ISDS). First, we document that host states have abandoned nearly 24 percent of regulations disputed by private investors in ISDS between 1987 and 2017. This behavior is puzzling because ISDS only requires host states to provide monetary compensation to investor-claimants and not the abandonment of disputed regulations. We theorize that host states are more likely to abandon a disputed regulation when the claimant has a greater potential to disrupt GVCs in the host economy. We then employ the non-parametric difference-in-differences estimator by Imai, Kim, and Wang (2021) and find that ISDS filings cause substantial decreases in GVC trade. Following this result, we provide descriptive statistics and qualitative evidence that support our core theoretical proposition that multinational corporations (MNCs) with the potential to disrupt GVC integration are more likely to see host states changing regulations in their favor. Our argument and evidence suggest that GVC integration can grow an MNC’s power to such an extent that the host state abandons a regulation that the MNC disputes.