The effectiveness of investment protection agreements in attracting foreign investments

Abstract

This article’s objective is to put into question whether investment protection agreements, while severely restricting States’ sovereign powers, effectively attract foreign investments in general and direct investments in particular, so as not to become an unnecessary burden on the State that turns to them. This shall be achieved bearing in mind specifically that the central idea of these treaties is to promote the flux of capital from developed countries to developing countries. After reviewing different studies on the subject, it can be shown that it is not possible to establish in a conclusive manner that investment protection agreements do or do not have a significant role in attracting investments, and that in fact, emphasis should be placed in other factors that play a more important part in promoting foreign investment.