Intimidating Sovereigns

In this chapter, the impact of investor–state dispute settlement (ISDS) on countries is examined more closely. Examples are given of how governments have changed their decisions to favour investors under ISDS pressure. As knowledge of ISDS continues to grow, state institutions face more pressure to avoid offending those most able to finance claims. Predictably, governments have responded to ISDS by institutionalizing ‘regulatory chill’; that is, by reconfiguring the state apparatus to privilege the ultra-wealthy, creating immeasurable potential losses for those who do not own wealth abroad. It is now reasonable to expect that such chill happens in all countries exposed to ISDS claims by wealthy investors and having at least some institutional capacity to identify and manage the risks.