International Relations/Political Science
06 November 2020

A Tripartite Relationship: Politics, Investment, and Law

In a book chapter for The Oxford Handbook of International Arbitration, Cédric Dupont, Professor of International Relations/Political Science and President of Executive Education at the Graduate Institute, and his co-authors, Professor Thomas Schultz and Professor Jason Yackee, claim that thinking investment arbitration through a political system enhances the existing discussion about the determinants of investment arbitration. Therefore, it offers a more lucid account than the longstanding references to obsolescing bargain, credible commitment, the rule of law, and development of sensible rules of state behaviour. Interview.

What made it worthwhile to write this chapter on investment arbitration and political systems theory?

This chapter is part of a larger project on the politics of investment arbitration, a topic initiated a few years ago with Thomas Schultz. The project focused on the search of political, legal and economic determinants (such as domestic rule of law and domestic governance, economic nationalism, economic hardship) driving investment arbitration. While exploring the effects of those determinants on the resort to arbitration, we have become increasingly interested in the overall evolution of the use of investment arbitration and have approached it from a systemic viewpoint.

What distinctive contributions does the chapter make to the literature on international arbitration?

It offers a novel view and encourages us to move beyond overly reductionist visions of international arbitration and to make better sense of the fragmented understanding that we have today of it. We use the concept of political system as a powerful heuristic to highlight logics of interactions (with a focus on stabilising or destabilising feedback loops) between different actors (states, investors, arbitral tribunals, arbitral institutions and NGOs).

Based on your conclusions, what are some of the future avenues of International Relations research on investment arbitration?

The promotion and protection of international investment is done through a series of international and domestic instruments that make what the IR literature labels as a regime complex. Our research calls for a better mapping of that complex and more attention to its evolution through time, notably as the number of arbitration claims and subsequent awards has significantly increased over the last 20 years – raising issues of legitimacy for a system that lacks a dominant, central international organisation.

Lastly, as a political scientist, how was your experience of working with scholars from legal studies? 

To be clear, this piece and the larger project in which it is situated would have never materialised short of my discussions with legal scholars. I developed an interest for the topic through multiple, informal discussions with them. Through those exchanges, we converged on some initial puzzles and since then have continued to find new puzzles as our research was proceeding. 

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Full citation of the chapter:
Dupont, Cédric G., Thomas Schultz, and Jason W. Yackee. “Investment Arbitration and Political Systems Theory.” In The Oxford Handbook of International Arbitration, edited by Thomas Schultz and Federico Ortino. Oxford: Oxford University Press, 2020.

Interview by Bugra Güngör, PhD candidate in International Relations and Political Science; editing by Nathalie Tanner, Research Office.
Banner image by Peter Hermes Furian/