Abstract

‘Judge Knot’ explores the biggest and the most controversial success story in international law: investor-state dispute settlement, or ISDS. Since 1990, investors have launched hundreds of claims against government regulation. This exclusive inside look explains what makes the system tick: its poorly understood centuries-old origins, why corporations demand investment law solutions to political problems, how arbitrators supply these solutions, and why the system lasts despite the many politicians and citizens unhappy with it. Building off of an unprecedented set of interviews with the arbitrators who actually decide the cases, ‘Judge Knot’ brings together the best of political science, law and development economics scholarship and offers a concrete alternative to ISDS that leverages what works about the system and discards what does not, so that international law can be more supportive of democracy and development goals.

“Lawyers, economists and lay people alike: read this book. Tucker’s lively narrative and crystal-clear explanations make buoyant a wonky subject matter. Deeply researched and well-sourced, Judge Knot: Politics and Development in International Investment Law is packed with fascinating case studies and insight into why the international law exists as it does today, and leavened by entertaining anecdotes. It may very well be the first book on international investment law that you can, in good faith, recommend to a friend.”
—Haley Edwards, Correspondent, Time; Author of Shadow Courts: The Tribunals That Rule Global Trade

“The world of international investment disputes may seem an obscure domain populated by narrow if upright lawyers speaking in esoteric languages. In this path-breaking work, Todd Tucker shows how it is actually where an epic power struggle is being fought between governments, corporations and citizens. If you want to understand the future of our economic world, you must read this book.”
—Ha-Joon Chang, Director, Centre of Development Studies, University of Cambridge, UK

Dr. Todd N. Tucker is a political scientist and fellow at the Roosevelt Institute.

“Judge Knot penetrates the dense and tangled thicket of arbitration of disputes between companies and states around the world. It rejects facile critiques of these processes from the right and the left, offering instead a thoughtful and imaginative set of prescriptions for democratizing global trade and investment. Lawyers, judges and activists will find much interesting and original material.”
—Anne-Marie Slaughter, President and CEO, New America

In recent decades, international legal constraints have shifted far beyond the national border. International lenders’ structural adjustment programs require states to slash budgets, privatize public enterprises and cut pensions. Trade agreements have shifted from locking in low tariffs to forbidding policies that today’s rich countries used to climb up the developmental ladder. This suite of neoliberal policies has been labeled the “golden straitjacket” for their supposed promise of unlocking economic growth. [NP] ‘Judge Knot’ explores a corollary to the straitjacket: investor-state dispute settlement (ISDS), where foreign investors can sue host states out of national courts before transnational tribunals over government regulation. Since 1990, corporations have launched hundreds of cases against states over environmental conservation, financial stabilization and public service provision. In an era of Donald Trump, Brexit, Bernie Sanders, and Jeremy Corbyn, criticism of this system has grown enormously. Yet meaningful reform has been difficult. Even though neoliberal economics is on the wane, its legal underpinnings remain attractive to the corporations that demand investment law and the arbitrators who supply it.

Building off of an unprecedented set of interviews with the arbitrators who actually decide the cases, the interdisciplinary ‘Judge Knot’ brings together the best of political science, law and development economics scholarship to offer a historical institutionalist account of investment arbitration in an era of unprecedented judicialization of international affairs. The book offers concrete alternatives to ISDS that leverage what works about the system and discard what doesn’t, so that international law can be more supportive of democracy and development goals.