Skip to content
Licensed Unlicensed Requires Authentication Published by De Gruyter October 12, 2018

Must We Protect Foreign Investors?

  • Johannes Kniess EMAIL logo


Investment protection clauses, and the investor-state dispute settlement (ISDS) mechanisms they enable, have become a common feature of international agreements on trade and investment. Intended to promote foreign investment, these protections may also discourage governments from regulating in the public interest. This raises challenging normative questions about the rights of investors and distributive justice. In this paper, I argue that a global investment regime that disadvantages developing countries and socially disadvantaged groups is prima facie unfair. This conclusion must be defended against the claim that investors have certain independent moral rights to have their property protected, regardless of the distributive consequences. Granting the premise that such investor rights exist, I argue that these cannot plausibly ground a general rule against public interest regulation that undermines the value of property. I conclude that even if foreign investors have rights that must be safeguarded, the current investment regime must be reformed.


I owe thanks to Chuck Beitz, Shuk Ying Chan and Harrison P. Frye for commenting on earlier drafts of this paper. I am also indebted to two anonymous reviewers and the editors of Moral Philosophy and Politics for their helpful suggestions.


Banai, A. (2017). ‘Is Investor-State Arbitration Unfair? A Freedom-Based Perspective’, Global Justice: Theory Practice Rhetoric 10 (1): 57–78.10.21248/gjn.10.1.112Search in Google Scholar

Carens, J. (2013). The Ethics of Immigration (New York: Oxford University Press).Search in Google Scholar

Cheneval, F. (2006). ‘Property Rights as Human Rights’, in H. de Soto and F. Cheneval (eds.). Realizing Property Rights (Zurich: Ruffer and Rub), pp. 11–17.Search in Google Scholar

Crawford, R. (1996). Regime Theory in the Post-Cold War World: Rethinking Neoliberal Approaches to International Relations (Brookfield: Dartmouth).Search in Google Scholar

De Bres, H. (2012). ‘The Many, not the Few: Pluralism about Global Distributive Justice’, Journal of Political Philosophy 20 (3): 314–340.10.1111/j.1467-9760.2010.00389.xSearch in Google Scholar

De Ville, F. and Siles-Brügge, G. (2016). TTIP: The Truth about the Transatlantic Trade and Investment Partnership (Cambridge and Malden, MA: Polity).Search in Google Scholar

Dietsch, P. (2017). ‘Growing the Pie or Slicing It Differently. On the Need to Disentangle Two Aspects of Trade Agreements’, Global Justice: Theory Practice Rhetoric 10 (1): 43–56.10.21248/gjn.10.1.111Search in Google Scholar

Dolzer, R. and Scheuer, C. (2012). Principles of International Investment Law: Second Edition (Oxford: Oxford University Press).10.1093/law/9780199651795.001.0001Search in Google Scholar

Garcia, F. et al. (2015). ‘Reforming the International Investment Regime: Lessons from International Trade Law’, Journal of International Economic Law 18 (1): 861–892.10.1093/jiel/jgv042Search in Google Scholar

Guzman, A. (1998). ‘Why LDCs Sign Treaties that Hurt Them: Explaining the Popularity of Bilateral Investment Treaties’, Virginia Journal of International Law 38: 639–688.Search in Google Scholar

Hallward-Driemeier, M. (2003). ‘Do Bilateral Investment Treaties Attract Foreign Direct Investment? Only a Bit … and They Could Bite’, World Bank Policy Research Working Paper 3121.10.1596/1813-9450-3121Search in Google Scholar

Honoré, A.M. (1961). ‘Ownership’, in A.G. Guest (ed.). Oxford Essays in Jurisprudence (Oxford: Oxford University Press), pp. 112–128.Search in Google Scholar

Hume, D. (1978/1739). A Treatise of Human Nature. Edited by L.A. Selby–Bigge and P.H. Nidditch (Oxford: Clarendon Press).10.1093/oseo/instance.00046221Search in Google Scholar

Isiksel, T. (2016). ‘The Rights of Man and the Rights of the Man-Made: Corporations and Human Rights’, Human Rights Quarterly 38 (2): 294–349.10.1353/hrq.2016.0031Search in Google Scholar

James, A. (2012). Fairness in Practice. A Social Contract for the Global Economy (New York: Oxford University Press).10.1093/acprof:oso/9780199846153.001.0001Search in Google Scholar

James, A. (2017). ‘Investor Rights as Nonsense – On Stilts’, in L. Herzog (ed.). Just Financial Markets? Finance in a Just Society (Oxford: Oxford University Press), pp. 205–230.10.1093/oso/9780198755661.003.0009Search in Google Scholar

Krasner, S. (1982). ‘Structural Causes and Regime Consequences: Regimes as Intervening Variables’, International Organization 36 (2): 185–205.10.1017/S0020818300018920Search in Google Scholar

Kube, V. and Petersmann, E. (2016). ‘Human Rights Law in International Investment Arbitration’, Asian Journal of WTO & International Health Law & Policy 11: 65–114.10.2139/ssrn.2731770Search in Google Scholar

Langford, M., Behn, D., and Lie, R.H. (2017). ‘The Revolving Door in International Investment Arbitration’, Journal of International Economic Law 20 (2): 301–332.10.1093/oso/9780198816423.003.0008Search in Google Scholar

Machan, T. (2001). ‘The Right to Private Property’, Internet Encyclopedia of Philosophy, (accessed on January 23, 2018).Search in Google Scholar

Miller, D. (2016). ‘Is There a Human Right to Immigrate?’, in S. Fine and L. Ypi (eds.). Migration in Political Theory. The Ethics of Movement and Membership (Oxford and New York: Oxford University Press), pp. 11–31.10.1093/acprof:oso/9780199676606.003.0002Search in Google Scholar

Neumayer, E. and Spess, L. (2005). ‘Do Bilateral Investment Treaties Increase Foreign Direct Investment to Developing Countries?’, World Development 33 (10): 1567–1585.10.1093/acprof:oso/9780195388534.003.0007Search in Google Scholar

Oberman, K. (2016). ‘Immigration as a Human Right’, in S. Fine and L. Ypi (eds.). Migration in Political Theory. The Ethics of Movement and Membership (Oxford and New York: Oxford University Press), pp. 32–56.10.1093/acprof:oso/9780199676606.003.0003Search in Google Scholar

Poulsen, L.S. (2015). Bounded Rationality and Economic Diplomacy (Cambridge: Cambridge University Press).10.1017/CBO9781316401941Search in Google Scholar

Rawls, J. (1971). A Theory of Justice (Cambridge MA: Harvard).10.4159/9780674042605Search in Google Scholar

Raz, J. (1986). The Morality of Freedom (Oxford: Oxford University Press).Search in Google Scholar

Salacuse, J. (2010). ‘The Emerging Global Regime for Investment’, Harvard International Law Journal 51: 427–474.Search in Google Scholar

Salacuse, J. and Sullivan, N. (2005). ‘Do BITs Really Work: An Evaluation of Bilateral Investment Treaties and Their Grand Bargain’, Harvard International Law Journal 46: 67–130.10.1093/acprof:oso/9780195388534.003.0005Search in Google Scholar

Sapiro, M. (2015). ‘Transatlantic Trade and Investment Negotiations: Reaching a Consensus on Investor-State Dispute Settlement’, Global Views (Brookings Institution) 5: 1–27.Search in Google Scholar

Scanlon, T.M. (1998). What We Owe to Each Other (Cambridge MA: Belknap).Search in Google Scholar

Schill, S. (2009). The Multilateralization of International Investment Law (Cambridge: Cambridge University Press).10.1017/CBO9780511605451Search in Google Scholar

Simmons, B. (2014). ‘Bargaining over BITs, Arbitrating Awards: The Regime for Protection and Promotion of International Investment’, World Politics 66 (1): 12–46.10.1017/S0043887113000312Search in Google Scholar

Subedi, S. (2016). International Investment Law. Reconciling Policy and Principle (Oxford: Hart).Search in Google Scholar

Sweetland Edwards, H. (2016). Shadow Courts: The Tribunals that Rule Global Trade (New York: Columbia Global Reports).Search in Google Scholar

Van der Vossen, B. and Brennan, J. (forthcoming). In Defense of Openness (Oxford: Oxford University Press).10.1093/oso/9780190462956.001.0001Search in Google Scholar

Van Harten, G. (2007). Investment Treaty Arbitration and Public Law (Oxford: Oxford University Press).10.1093/acprof:oso/9780199552146.001.0001Search in Google Scholar

Waldron, J. (1990). The Right to Private Property (Oxford: Oxford University Press).10.1093/acprof:oso/9780198239376.001.0001Search in Google Scholar

Waldron, J. (2012). The Rule of Law and the Measure of Property (Cambridge: Cambridge University Press).10.1017/CBO9781139169318Search in Google Scholar

Wenar, L. (2016). Blood Oil. Tyrants, Violence and the Rules that Run the World (New York: Oxford University Press).Search in Google Scholar

Yackee, J. (2008). ‘Bilateral Investment Treaties, Credible Commitment, and the Rule of (International) Law: Do BITs Promote Foreign Direct Investment?’, Law & Society Review 42 (4): 805–832.10.1111/j.1540-5893.2008.00359.xSearch in Google Scholar

Published Online: 2018-10-12
Published in Print: 2018-11-27

© 2018 Walter de Gruyter GmbH, Berlin/Boston

Downloaded on 3.12.2023 from
Scroll to top button