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When do states renegotiate investment agreements? The impact of arbitration

Author

Listed:
  • Yoram Z. Haftel

    (The Hebrew University of Jerusalem)

  • Alexander Thompson

    (Ohio State University)

Abstract

Given that their main function is to forge durable commitments, it is notable that many international treaties change over time through the practice of renegotiation. While some agreements have remained intact after their initial conclusion, others are amended, updated, or replaced. Why are some international agreements renegotiated while others remain stable? This paper offers a systematic analysis of treaty renegotiation by presenting theoretical propositions and testing them in the context of bilateral investment treaties (BITs). We argue that states renegotiate when they learn new information about the legal and political consequences of their treaty commitments, and that such learning is most likely to take place when states are involved in investor-state dispute settlement cases. Employing an original data set on renegotiated BITs, we find robust empirical support for the learning argument. We conclude by discussing implications for the study of institutional change and the evolving investment regime.

Suggested Citation

  • Yoram Z. Haftel & Alexander Thompson, 2018. "When do states renegotiate investment agreements? The impact of arbitration," The Review of International Organizations, Springer, vol. 13(1), pages 25-48, March.
  • Handle: RePEc:spr:revint:v:13:y:2018:i:1:d:10.1007_s11558-017-9276-1
    DOI: 10.1007/s11558-017-9276-1
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    Cited by:

    1. Duy Vu, 2018. "Reasons not to Exit? A Survey of the Effectiveness and Spillover Effects of International Investment Arbitration," GREDEG Working Papers 2018-35, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    2. Renee Bowen & Manfred Elsig, 2018. "Trade and investment: Introduction to the special issue," The Review of International Organizations, Springer, vol. 13(2), pages 137-142, June.
    3. Charlotte De Bruyne & Itay Fischhendler & Yoram Z. Haftel, 2020. "Design and change in transboundary freshwater agreements," Climatic Change, Springer, vol. 162(2), pages 321-341, September.
    4. Duy Vu, 2019. "Reasons not to exit? A survey of the effectiveness and spillover effects of international investment arbitration," European Journal of Law and Economics, Springer, vol. 47(2), pages 291-319, April.
    5. Leslie Johns & Calvin Thrall & Rachel L. Wellhausen, 2020. "Judicial economy and moving bars in international investment arbitration," The Review of International Organizations, Springer, vol. 15(4), pages 923-945, October.
    6. Inken Borzyskowski & Felicity Vabulas, 2019. "Hello, goodbye: When do states withdraw from international organizations?," The Review of International Organizations, Springer, vol. 14(2), pages 335-366, June.
    7. Charlotte De Bruyne & Itay Fischhendler & Yoram Z. Haftel, 0. "Design and change in transboundary freshwater agreements," Climatic Change, Springer, vol. 0, pages 1-21.

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