An optimal investor-state dispute settlement mechanism
In: Journal of economics, Band 138, Heft 1, S. 1-16
Abstract
AbstractMany investment treaties include investor-state dispute settlement (ISDS) provisions which are supposed to protect a foreign investor against opportunistic behavior of a host country. This paper scrutinizes the optimal design of ISDS provisions that solve the holdup problem. It shows that an efficient investor protection mechanism requires an arbitrator as established in investment treaties. However, this arbitrator does neither have to learn nor to evaluate the circumstances of the dispute. Furthermore, any ISDS compensation from the government to the investor should not be based on reductions in investor profits but on the host country's welfare effects.
Sprachen
Englisch
Verlag
Springer Science and Business Media LLC
ISSN: 1617-7134
DOI
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