OECD Working Papers on International Investment

Selected studies on international investment and investment policy prepared for use within the OECD. They address such issues as investment agreements, dispute settlement, fair and equitable treatment, most favored nation treatment, and corruption.


Investment Treaties over Time - Treaty Practice and Interpretation in a Changing World

Investment treaty law reflects a permanent tension between stability and flexibility. Stability nurtures predictability, while flexibility helps legal systems stay in alignment with changing circumstances and evolving needs. This paper establishes an inventory of the mechanisms in investment treaty law that provide flexibility and surveys relevant treaty practice.

The paper: analyses the drivers of change in investment treaty law; provides an inventory of countries’ options – and limits – to alter their positioning vis-à-vis investment treaty law through ‘exit’ and ‘voice’; and analyses treaty provisions on, and States’ use of, flexibility in investment treaty law.

The paper finds that most treaties provide for little or no mechanism for countries to influence the use and interpretation of investment treaty law. The paper further finds that treaty provisions for ‘exit’ are likewise geared to provide stability rather than flexibility. Analysis of State practice presented in the paper shows that States rarely make use of the mechanisms available to them to influence treaty use and interpretation and that ‘exit’ from the system has likewise been rare so far.


Keywords: international investment agreements, international investment law, investment protection, investment treaties
JEL: F53: International Economics / International Relations, National Security, and International Political Economy / International Agreements and Observance; International Organizations; F21: International Economics / International Factor Movements and International Business / International Investment; Long-Term Capital Movements; K33: Law and Economics / Other Substantive Areas of Law / International Law; N40: Economic History / Government, War, Law, International Relations, and Regulation / Economic History: Government, War, Law, International Relations, and Regulation: General, International, or Comparative; P45: Economic Systems / Other Economic Systems / Other Economic Systems: International Trade, Finance, Investment and Aid
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