What Do Developing Countries Expect from the International Investment Regime?

The Material Constitution of International Investment Law

“…70 Proponents of IIL see this as a significant benefit, arguing that IIL promotes the rule of law and 'good governance' domestically, and thus not only protects investors, but also creates 'spill over' effects that improve state administrative practices to the good of national citizens, as well. 71 However, as Mavluda Sattorova has shown, this 'spill over' does not seem to play out on the ground: IIL appears to have had little impact in terms of promoting ex ante compliance with 'good governance' standards, with domestic responses instead tending toward the ambiguous, reactive, and bureaucratic. 72 Informal processes are also at work here, encouraging not only the spread of IIL, but also the narrative of IIL as necessary for development, as a tool for promoting the rule of law and good governance, and as essential for protecting the rights of investors against abuses by the state (and thus as a sibling regime to human rights law).…”

Investment Treaties and the Rule of Law Promise

“…136 In other words, the fear of arbitration by foreign investors should act as 'a deterrent mechanism' against short-term policy reversals and 'assist developing countries in promoting greater effectiveness of the rule of law at the domestic level'. 137 In organising our model of factors impacting internalisation, we include the conclusion of investment treaties as a potential factor leading to internalisation. We acknowledge our scepticism that the simple conclusion of investment treaties is likely to give rise to the development of significant internalisation processes.…”

Contribution to the National Rule of Law as a Legitimating Factor for International Investment Law – is it the Potential or the Outcome that Matters?

“…120 IIAs themselves usually do not contain the only or the most developed set of rule of law commitments obliging the particular host State. 121 States usually already have extensive international commitments to secure the rule of law domestically, 122 with which investment provisions essentially and substantively overlap, 123 as they also often overlap with constitutional obligations. 124 Therefore, it is unlikely that a host State did not already have a domestically or internationally sourced obligation to treat the investor and its investment nonarbitrarily, non-discriminatorily, predictably and transparently.…”