Bridging the Gap
Frankfurt Investment and Economic Law series
Edited by Stephan W. Schill, Christian J. Tams and Rainer Hofmann
Chapter 1: International investment law and development: Friends or foes?
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.