The Impact of Investment Treaties on Domestic Governance in Myanmar

Abstract

Supporters of investment treaties argue that the treaties encourage good governance and respect for the rule of law in countries that are bound by them. Critics argue that the treaties discourage legitimate, public interest regulation of foreign investment. The claims of both the supporters and the critics rest on a set of assumptions about the impact of investment treaties on government decision-making in the states that are bound by them. To date, these assumptions have been subject to little investigation.

This paper examines the impact of investment treaties on domestic governance through a single, detailed case-study of Myanmar. Myanmar is a powerful case study because, if investment treaties do have positive effects on domestic governance, it is a country where one would expect to see such effects. The paper draws on a series of semi-structured interviews with government officials, investment lawyers and foreign advisors to the Myanmar government, as well as an analysis of primary and secondary documents.

The findings cast doubt on supporters’ claims that investment treaties promote good governance and the rule of law, as well as complicating critics’ claims about regulatory chill. The overall finding is that investment treaties’ effects on domestic governance are primarily mediated through processes within the executive branch of government and that these effects are limited and often ad hoc. Investment treaties have no discernible impact on the judicial system in Myanmar, and little impact on legislation or regulatory rule-making processes.