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Regulatory Takings and Environmental Regulation in NAFTA's Chapter 11

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  • Aisbett, Emma
  • Karp, Larry S.
  • McAusland, Carol

Abstract

NAFTA's investment treaty has led to several expropriation compensation claims from investors hurt by new environmental regulations. Expropriation clauses in international treaties solve post-investment moral hazard problems such as hold-ups. However, these clauses can interact with National Treatment clauses in a manner that hinders investment. A police powers carve-out from the definition of expropriation can be Pareto-improving and can increase the level of foreign investment.

Suggested Citation

  • Aisbett, Emma & Karp, Larry S. & McAusland, Carol, 2006. "Regulatory Takings and Environmental Regulation in NAFTA's Chapter 11," CUDARE Working Papers 7195, University of California, Berkeley, Department of Agricultural and Resource Economics.
  • Handle: RePEc:ags:ucbecw:7195
    DOI: 10.22004/ag.econ.7195
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    File URL: https://ageconsearch.umn.edu/record/7195/files/wp061014.pdf
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    References listed on IDEAS

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    Cited by:

    1. Ronald B. Davies & Johannes Voget, 2008. "Tax competition in an expanding European Union," Working Papers 200904, School of Economics, University College Dublin.

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