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Democracy and International Investment Law

Lorenzo Cotula


The expanding reach of international investment law and the negotiation of major economic treaties between democratic polities have prompted new debates about the relationship between democracy and the international investment regime. This article develops an analytical framework for understanding that relationship. It first unpacks the concept of democracy, exploring the ‘rules-based’ and ‘action-based’ conceptions that emerge from political theory and their relevance to international investment law. It then examines three themes that frame the relationship between democracy and international investment law: the interface between the investment regime and national democratic space; the place of democratic processes in investment treaty making; and public participation in the settlement of investment disputes. The interplay between rules- and action-based dimensions provides a common thread across the three themes. The article concludes that there is a gap between formal rules and citizen action in promoting democratic oversight, and significant scope to develop more effective mechanisms to install democratic governance in the creation and implementation of international investment law.

Publication information

  • External: X00176
  • Published: Mar 2017 - Cambridge University Press, Cambridge
  • Theme: Law
  • Source pub: Leiden Journal of International Law
  • Journal ref: 30, 2
  • Language: English

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Cotula, L. (2017) Democracy and International Investment Law. Leiden Journal of International Law, 30(2), 351-382.
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International treaties, national laws and transnational contracts define the terms of an investment and influence the distribution of its costs and benefits. To promote inclusive sustainable development, IIED works with partners to rethink these legal documents and the process through which they are formulated.

More at www.iied.org:
Rethinking investment treaties, laws and contracts

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