Introduction

The academic literature on international investment treaties, foreign investment contracts and investor–State dispute settlement is dominated by legal analysis. This is understandable in light of the complexity and, until recently, relative obscurity of the field. However, it is imperative that scholars from other disciplines now become more actively engaged in the critical debates surrounding investment law and investment arbitration in particular. One example of an issue that has been inadequately addressed and often prematurely dismissed by legal scholars is ‘regulatory chill’. Fundamentally, the notion of regulatory chill suggests that investment arbitration – as an institution – may influence the course of policy development. For reasons that will be laid out in this chapter, investigating regulatory chill requires methods and approaches more familiar to political scientists than to lawyers.

The regulatory chill hypothesis

Soloway suggests that the ‘meaning of the term “regulatory chill” is not clear’. This is a fair critique; the vast majority of scholars and non-governmental organisations (NGOs) that have referred to regulatory chill in the context of discussions about investor–State dispute settlement have not precisely articulated what their understanding of the term is. That being said, it should be self-evident that these commentators were not implying that regulators would ‘cease to adopt any new regulations and that the entire environmental regulatory framework [would grind] to a halt’. Similarly, it is highly unlikely that anyone who has expressed a concern about regulatory chill would argue that regulators should be permitted to discriminate, ‘unduly’, against foreign investors.