Assessing the Impacts of Investment Treaties: Overview of the evidence

The report examines the impacts of investment treaties on developing countries, noting a modest increase in some types of foreign direct investment (FDI) but finding no clear evidence for other benefits like domestic reform or the rule of law. It highlights that treaties limit government policy space and create distributive costs through compensation requirements, though insufficient evidence exists to determine the overall net effect for developing countries.

• Academic literature suggests investment treaties likely cause a modest increase in certain types of foreign direct investment (FDI) to developing countries, though methodological issues make it difficult to consistently identify this effect or the specific treaty elements responsible.
• The effectiveness of investment treaties in increasing FDI may be limited from a host state's perspective because they appear most effective in sectors that are least beneficial and because they grant preferential rights to only some investors.
• There is no clear evidence that investment treaties provide benefits such as the promotion of the rule of law, the facilitation of domestic reforms, or the depoliticization of investment disputes.
• Investment treaties impose costs by limiting government policy space and creating distributive impacts, such as requiring states to pay compensation to foreign investors that would not have been paid without the treaty.
• Current evidence is insufficient to determine the overall net effect of investment treaties for developing countries, and this effect likely varies between different countries.

APA

Bonnitcha,, J. (2017). Assessing the Impacts of Investment Treaties: Overview of the evidence. International Institute for Sustainable Development. https://www.iisd.org/publications/report/assessing-impacts-investment-treaties-overview-evidence

Chicago

Bonnitcha,, Jonathan. Assessing the Impacts of Investment Treaties: Overview of the evidence. International Institute for Sustainable Development, 2017. https://www.iisd.org/publications/report/assessing-impacts-investment-treaties-overview-evidence.

Wikipedia

{{cite report |last1=Bonnitcha, |first1=Jonathan |title=Assessing the Impacts of Investment Treaties: Overview of the evidence |publisher=International Institute for Sustainable Development |date=27 September 2017 |url=https://www.iisd.org/publications/report/assessing-impacts-investment-treaties-overview-evidence |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bonnitcha2017assessing, author = {Bonnitcha,, Jonathan}, title = {{Assessing the Impacts of Investment Treaties: Overview of the evidence}}, institution = {International Institute for Sustainable Development}, year = {2017}, month = sep, url = {https://www.iisd.org/publications/report/assessing-impacts-investment-treaties-overview-evidence}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }