1st Edition
The Popular Legitimacy of Investor-State Dispute Settlement Contestation, Crisis, and Reform
This book offers theoretical arguments and original empirical data on the legitimacy of the investor-state dispute settlement system in the eyes of the general public.
The legitimacy of the investor-state dispute settlement (ISDS) system has become a major issue in recent negotiations on new trade and investment agreements, such as the Transatlantic Trade and Investment Partnership (TTIP), the Comprehensive Economic and Trade Agreement (CETA), and the Trans-Pacific Partnership Agreement (TPP). This book considers the remarkable rise of investor-state arbitration, its politicization and the corresponding legitimacy crisis that has induced a political process of ISDS reform. The book applies theoretical arguments about legitimacy perceptions among the mass public and tests these arguments in survey experiments in Germany, France, and the US to answer the question of whether ISDS reform can be successful. By showing that large parts of the population hold negative perceptions about the current system of private arbitration and believe that an international investment court and domestic courts are more legitimate dispute resolution systems, the book extends the debate on the legitimacy of the ISDS mechanism, which has so far been dominated by conflicting normative claims of supporters and critics. With regard to the academic debate about legitimacy in global governance, the author underlines that the legitimacy perceptions of ordinary citizens must be taken seriously to ensure the sustainability of global governance and international law in the long term.
This book will be of interest to academics working in international relations, international political economy, international law, transnational law, authority, politicization, and legitimacy of global governance. It will also be of great use to practitioners in the field of international investment law, including lawyers, and government officials working in international dispute settlement.
1. Introduction
Why the popular legitimacy of ISDS matters
Popular legitimacy, institutional design, and reform
Research design
Plan of the book
2. The Theory of Popular Legitimacy
What is popular legitimacy?
Citizens as a relevant legitimation audience
Legitimacy beliefs
Legitimation through reform
Conclusion
3. Rise and Politicization of Investor-State Dispute Settlement
The emergence of Investor-State dispute settlement
ISDS as global governance
The politicization of ISDS in TTIP
Conclusion: Growing demand for legitimacy
4. Perspectives on Legitimacy and Reform of Investor-State Dispute Settlement
The defense of investment arbitration
The criticism of investment arbitration
The proponents of an international investment court
Returning to domestic courts
Conclusion: Competing views
5. How Institutional Design Affects ISDS’ Popular Legitimacy
Public opinion on foreign investment
Institutional design
Design of the trade and investment agreement experiment
Results
Conclusion: Institutional design matters
6. Losing in Investment Disputes
Unfavorable decisions
Design of the investment dispute experiment
Results
Conclusion: Decline in legitimacy beliefs
7. Communicating ISDS Reform
Political communication as legitimation
Design of the political communication experiment
Results
Conclusion: No legitimacy boost
8. Conclusion: The Future of Investor-State Dispute Settlement
The ISDS legitimacy crisis revisited
Where is the investment treaty regime heading?
The mass public and the contestation of international cooperation
Backlash against international courts: Limited constraints on judicial authority
Reforming global governance institutions
Biography
Marius Dotzauer is a Postdoctoral Research Fellow at the Institute of Political Science at the University of Münster, Germany. His research focuses on global governance and the global economy, specifically the politics and law of trade and investment.
