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A Non-Technical Introduction to Economic Aspects of International Investment Agreements

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International investment agreements have become increasingly controversial. The agreements are alleged to be beset with a large number of deficiencies that harm host countries in particular. For instance, they are said to cause “regulatory chill”, to distorts investment patterns, and to lead to excessive litigation due to the Investor-State Dispute Settlement (ISDS) mechanisms they almost invariably contain. Many of the issues brought up in this debate have evident economic aspects. But until recently there has been very little economic literature on the driving forces behind these agreements, on their appropriate design, and on their effects. There is a nascent theoretical literature on investment agreements and regulatory expropriations, however. This literature is still very much in its infancy. The purpose of this note is to explain in non-technical terms some observations that emerge from this early literature.

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  • Horn, Henrik & Norbäck, Pehr-Johan, 2018. "A Non-Technical Introduction to Economic Aspects of International Investment Agreements," Working Paper Series 1250, Research Institute of Industrial Economics.
  • Handle: RePEc:hhs:iuiwop:1250
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    References listed on IDEAS

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    1. Emma Aisbett & Larry Karp & Carol Mcausland, 2010. "Police Powers, Regulatory Takings and the Efficient Compensation of Domestic and Foreign Investors," The Economic Record, The Economic Society of Australia, vol. 86(274), pages 367-383, September.
    2. Eckhard Janeba, 2019. "Regulatory chill and the effect of investor state dispute settlements," Review of International Economics, Wiley Blackwell, vol. 27(4), pages 1172-1198, September.
    3. Kohler, Wilhelm & Stähler, Frank, 2019. "The economics of investor protection: ISDS versus national treatment," Journal of International Economics, Elsevier, vol. 121(C).
    4. James R. Markusen, 2001. "Commitment to Rules on Investment: The Developing Countries’ Stake," Review of International Economics, Wiley Blackwell, vol. 9(2), pages 287-302, May.
    5. Joachim Pohl, 2018. "Societal benefits and costs of International Investment Agreements: A critical review of aspects and available empirical evidence," OECD Working Papers on International Investment 2018/1, OECD Publishing.
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    More about this item

    Keywords

    International investment agreements; Regulatory chill; Expropriation; ISDS;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law

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