Behn, Langford, & Berge: Development or Democracy? Explaining Outcomes in Investment Treaty Arbitration

Daniel Behn (Univ. of Oslo - PluriCourts), Malcolm Langford (Univ. of Oslo - Law) & Tarald Laudal Berge (Univ. of Oslo - Political Science) have posted Development or Democracy? Explaining Outcomes in Investment Treaty Arbitration. Here's the abstract:

Critics of the international investment treaty regime have claimed that the system of adjudication is biased against developing states. Other scholars, such as Susan Franck, have countered by arguing that any difference in treatment is better explained by the lack of democratic governance in developing states as measured by the Polity IV indicator. This paper probes and tests this new democratic governance hypothesis. First, it replicates Franck’s bivariate/trivariate model with a much larger sample size of cases (n=318 rather than 144) and alternative measures of development. Second, it sets out a disaggregated set of democracy and development hypotheses together with relevant control factors. Third, it runs multivariate models with indicators that correspond to these different hypotheses. The results are otherwise than Franck’s. Development status is a consistently powerful explanation of arbitration outcomes even when controlled for a range of democratic governance variables. The only exception to this pattern is a rule of law indicator. However, we conclude that caution is needed in interpreting these results for both theoretical and empirical reasons.