Investing in Democracy? Political Process and International Investment Law

Abstract

International investment law is rushing to stake out the high ground of democratic theory. It has been claimed that the interests of foreign investors ordinarily will not be represented within a host state's political processes and so investors deserve heightened protection from policy decisions that adversely affect investment interests. I argue in the present article that this smuggling of democratic theory and constitutional postulates into international investment law is inapt and, as an empirical matter, inaccurate. By looking to the US origins of political process doctrine, I argue that its invocation by international investment tribunals is inapposite given the doctrine's concern with relegating ordinary economic regulation to relaxed scrutiny. Nor is reference to the European experience all that helpful -representation reinforcement review has not been a hallmark of European jurisprudence. I claim that this worry over democratic processes masks an attempt at legitimating controversial review by investment tribunals of high public-policy matters. Moreover, as empirical studies suggest, this solicitude offered to investors by political process review is mostly unwarranted as foreign corporate actors can and do shape host domestic policy.

Inter-civilizational approaches to investor-state dispute settlement: Global constitutional adjudication or international adjudication?

“…111 For instance, Schneiderman has questioned whether foreign investors are 'the privileged citizens of a new constitutional order'. 112 He cautions that while the use of constitutional principles in investment arbitration can symbolically suggest that investment tribunals are similar to national high courts, 113 not only can IIAs jeopardise the 'constitutional' right of sovereign states to regulate, but investment arbitration can risk invoking constitutional principles for purposes that are at odds with their rationale. 114 Finally, a purely domestic public law approach risks blurring the distinction between international and constitutional law, thus interpreting the former through the lens of the latter, while a traditional tenet of international law requires states to comply with international law even if doing so was in conflict with national law, including constitutional law.…”

Application of Crowd Thought and Herd Behavior in Economic Investment

“…In turn, investment return will cause psychological changes in investors. Blind crowd thought and herd behavior can make investors become losers in the investment process due to lack of cognition and subject to internal and external factors, and worse, they will be driven to unconsciously violate normal investment theory (Schneiderman, 2010). Besides, as the profiteering industries will greatly expand the information to attract investors, blind behaviors will lead to excessive investments or overcapacity, which in turn reduces the investor's returns, and ultimately lose chance to achieve desired economic effect due to crowd mentality or herd behavior (Seiler, Lane, & Harrison, 2014).…”

Legitimacy and Reflexivity in International Investment Arbitration: A New Self-Restraint?

“…Ibid. For a fuller discussion of these point, and an analysis of the Tecmed case more generally, seeSchneiderman (2010b).33 Continental Casualty "is a rich piece of jurisprudence, far more sophisticated then the awards produced in the four previous cases" (Stone Sweet 2009b, p. 74).34 They point to the decision in Tecmed as "illustrat[ing] well the use of a proportionality analysis to manage tensions between investment protection and competing public policies"(2009, p. 33).…”