On the international investment regime: A critique from equality

The international investment regime has come under increasing scrutiny, with several developing countries withdrawing from bilateral investment treaties in recent years. A central worry raised by critics is that investment treaties undermine national self-determination. Proposed reforms to the regime have focused on rebalancing the distribution of power between states and investors to restore ‘enlarged regulatory space’ for the former. Contra this critique from national self-determination, in this paper I argue that infringements on national self- determination cannot alone explain why the investment regime is morally problematic. Instead, on this egalitarian view, the regime is objectionable because it empowers a class of agents, whose interests are reliably opposed to egalitarian economic policy, to constrain national self-determination. In effect, the investment regime undermines states’ capacity to address inequality within and between states and is unjust for that reason. The moral and practical upshot is that reforms to the regime ought to empower disadvantaged groups to exert disproportionate leverage over the terms and practice of international investment, and to appeal to global institutions to do so. In other words, our moral assessment of a given global institution or practice should not depend on whether it constrains national self-determination, but on who it empowers to do so.