What Is Wrong with Investment Arbitration? Evidence from a Set of Behavioural Experiments

Abstract

Abstract Investment arbitration has attracted growing criticism both in academia and in the general political debate. The system has been criticized by groups and stakeholders with very different agendas – from academics to anti-globalization activists, from alt-right groups to policy-makers. While sharing a common aversion to such dispute resolution mechanism, these groups do not generally take the same viewpoints, and the same type of criticism could originate from different political and theoretical underpinnings. The current efforts to reform investor-state dispute settlement, undertaken both by the European Union and by the United Nations Commission on International Trade Law, constitute to a large extent an attempt to respond to the aforementioned public criticism. However, in spite of the growing importance of the topic in the public debate, reform discussions have been predominantly, if not exclusively, focused on states and their roles in, and their expectations towards, investment arbitration. Public opinion, conversely, remains largely overlooked. To fill this gap, this research devises an experimental approach to understand the roots of public criticism(s) against investment arbitration. In so doing, it aims to generate a constructive, timely and accessible empirical analysis of the theoretical underpinnings of ISDS criticisms, providing an integrated guide to one of the most heated debates in international economic law today. The main purpose is to understand which are the points of friction (real or perceived) that trigger public criticism against investment arbitration and, in the light of this information, whether this dispute resolution mechanism should be maintained in its current form, partially reformed or rejected entirely. To this end, the article presents the results of the first-ever set of behavioural experiments concerning ISDS and public opinion.