The Emerging Global Regime for Investment


Although the 3000 international investment treaties concluded since the end of World War II are separate and distinct international legal instruments, they constitute, as a group, an emerging global regime for investment. Drawing on regime theory from the field of international relations, this Article examines the elements of the international investment regime, the reasons for its development, the goals that it pursues, and the challenges that it faces. While having all the characteristics of other international regimes, the investment regime also has three unique features: it has been bilaterally, rather than multilaterally, constructed; it decentralizes and privatizes decisionmaking processes; and it is not based on a multilateral international organization. All of these features have significant consequences for the functionality and sustainability of the regime. The regime also faces four major challenges: (1) disappointing regime results; (2) perceived defective decisionmaking processes and unjustified constraints on national sovereignty; (3) divergence of participant expectations; and (4) the impact of national and global economic crises. On the other hand, certain other factors tend to give the regime a sticky quality that makes the departure of members difficult. Nonetheless, the international investment regime will require wise management and flexible leadership in the future if it is to withstand these challenges and achieve its potential.