Table of Contents

International Investment Law and Development

International Investment Law and Development

Bridging the Gap

Frankfurt Investment and Economic Law series

Edited by Stephan W. Schill, Christian J. Tams and Rainer Hofmann

Foreign investment is meant to contribute to the host country’s development, and yet international investment law has often been seen as an obstacle to (sustainable) development. So are investment and development friends or foes? Combining critical reflection and detailed analysis, this timely volume explores the relationship between the two concepts and explores options of harnessing investment for development.

Chapter 1: International investment law and development: Friends or foes?

Stephan W. Schill, Christian J. Tams and Rainer Hofmann

Subjects: development studies, law and development, law - academic, international economic law, trade law, international investment law, law and development


The relationship between international investment law and international development law has long been a history of ignorance and mistrust. This need perhaps not have been so, as the two fields seem rather closely linked. Investment law is, as the First Recital in the Preamble of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) indicates, premised on a development nexus. Moreover, there is broad consensus that investment, including foreign investment, can have a positive impact on economic development at a macro-economic level and serve as an instrument both for the transfer of technology and for financing specific development projects. The connection between investment and development is also recognized in a large number of development policy instruments, including the Agenda 21 of the UN Conference on Environment and Development (1992), the Monterrey Consensus and the Johannesburg Plan of Implementation (2002), the Doha Declaration on Financing for Development (2008), and the UN Millennium Development Goals (MDGs). In fact, one may ask with some justification whether international investment law would exist as a privileged body of law for the promotion and protection of foreign investment unless it was assumed, rightly or wrongly, that investment contributed to development? Notwithstanding the nexus between investment and development, the literature and jurisprudence on international investment law until recently have largely treated the law of international development in passing. Similarly, models for international investment agreements (IIAs) have only rarely been conceptualized from a development perspective.