Legalization, Diplomacy, and Development: Do investment treaties de-politicize investment disputes?

By Geoffrey Gertz, Srividya Jandhyala, and Lauge N. Skovgaard Poulsen, Published by Elsevier in World Development, volume 107, July 2018, pp. 238–252

Architects of the investment treaty regime, as well as many current proponents, have suggested that the treaties also allow developing countries to de-politicize investor–state disputes, shielding commercial disputes from broader political and diplomatic considerations with developed states. The paper subjects this widely accepted and promoted argument to empirical investigation, using a dataset of U.S. diplomatic actions in 219 investment disputes across 73 countries and case studies of U.S. State Department diplomatic cables. The authors find no evidence for the de-politicization hypothesis. Their findings provide a critical corrective to the understanding of the investment treaty regime and its effects on developing countries. Available at