Introduction

This paper attempts to explain issues of fairness and inconsistency in investor-state arbitration with the New Institutional Economics (NIE) framework. It argues that the NIE correlates to international investment regime in two ways: First, municipal institutions are direct determinants in locational decisions of investors. Second, international investment law helps entrenching municipal institutional rights promised to foreign investors. This paper questions whether arbitral tribunals are responsive to institutional settings when they interpret treaty standards. It revisits some of the ...