Journal Article

International Arbitration of Investment Disputes: Are Poor and Badly Governed Respondent States More Likely to Lose?

Applied Economics Letters, 25(5): 321-325

Compelling empirical evidence on whether investor-state dispute settlement (ISDS) is systematically biased against poor respondent states hardly exists. We focus on disentangling the effects of the respondent state’s per-capita income and the strength of domestic rule of law on ISDS outcomes. We find that both, higher income and stronger than ‘normal’ rule of law reduce the probability of investor wins in international arbitration of disputes.


Julian Donaubauer
Peter Nunnenkamp