Rethinking National Investment Laws

The report examines how national investment laws have evolved from domestic development tools in the 1950s to instruments reflecting international treaty standards between 1980 and 2010, and finally toward a modern era of diverse, context-specific designs. Based on a survey of 70 laws, it identifies seven primary functions of investment laws: governing admission, administering incentives, facilitating investment, guaranteeing legal protection, managing disputes, specifying investor obligations, and monitoring investment. The authors argue against 'off-the-shelf' models, instead proposing a framework where policy-makers first define their ultimate objectives—such as promoting sustainable development—and then determine which specific functions and legal structures are appropriate for their national context.

• National investment laws have undergone significant shifts in purpose: from 1950s-1970s tools for domestic policy and development plans, to 1980-2010 instruments used to incorporate international investment protection standards and tax incentives, to a current trend of diversifying practices to avoid the legal risks associated with treaty-modelled laws.
• A survey of 70 investment laws reveals seven primary functions these laws serve today: governing the admission and approval of new foreign investment (at least 60% of laws), conferring and administering investment incentives (at least 80%), facilitating investment, guaranteeing legal protection (roughly 70%), managing investor-state disputes (almost 70%), specifying investor obligations, and monitoring/oversight of foreign investment.
• While many laws provide legal protections, they rarely mirror the full scope of international treaties; for instance, fewer than 10% of the reviewed national laws include fair and equitable treatment provisions.
• The report argues that there is no universal 'best practice' or 'off-the-shelf' model for investment laws, as the appropriate design depends entirely on the national context and the specific policy objectives a government wishes to achieve.
• The authors propose a reform framework that prioritizes the identification of an ultimate objective—typically promoting sustainable development—and the disaggregation of that goal into proximate objectives, such as protecting national security or maximizing benefits for local communities, before deciding on the law's functions and content.
• Certain common features of investment laws carry acute risks: tax incentives can deplete public funds for investments that would have happened anyway, and protections like stabilization or fair and equitable treatment can create legal risks similar to those found in old-style investment treaties.

APA

Bonnitcha, J., Nikiéma, S. H., & John, T. S. (2023). Rethinking National Investment Laws. International Institute for Sustainable Development. https://www.iisd.org/system/files/2023-07/rethinking-national-investment-laws-summary-en.pdf

Chicago

Bonnitcha, Jonathan, Suzy H. Nikiéma, and Taylor St John. Rethinking National Investment Laws. International Institute for Sustainable Development, 2023. https://www.iisd.org/system/files/2023-07/rethinking-national-investment-laws-summary-en.pdf.

Wikipedia

{{cite report |last1=Bonnitcha |first1=Jonathan |last2=Nikiéma |first2=Suzy H. |last3=John |first3=Taylor St |title=Rethinking National Investment Laws |publisher=International Institute for Sustainable Development |date=July 2023 |url=https://www.iisd.org/system/files/2023-07/rethinking-national-investment-laws-summary-en.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bonnitcha2023rethinking, author = {Bonnitcha, Jonathan and Nikiéma, Suzy H. and John, Taylor St}, title = {{Rethinking National Investment Laws}}, institution = {International Institute for Sustainable Development}, year = {2023}, month = jul, url = {https://www.iisd.org/system/files/2023-07/rethinking-national-investment-laws-summary-en.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }