Political Risk and International Investment Law

Abstract

International investment law provides a means for states to mitigate political risks that foreign investors face inside their borders. Its status quo includes thousands of international investment agreements (IIAs) and Investor–State Dispute Settlement (ISDS), a dispute resolution mechanism in which foreign, private investors sue host states in ad hoc international tribunals in pursuit of monetary compensation for property rights violations. In this review, we survey the vast contemporary literature on this regime to evidence the ways in which scholars have challenged the purported original goals of international investment law and its distributional consequences. In light of this literature's accomplishments, we highlight opportunities for a refocusing of international relations scholars’ research agenda on dynamics of continuity and change in the regime. The status quo in international investment law is fragile, and, in our view, the regime is on the brink of a major shift toward prioritizing state sovereignty well above political risk mitigation.