Is the Washington Consensus Really Dead? An Empirical Analysis of FET Claims in Investment Arbitration

44 Pages Posted: 21 Mar 2018 Last revised: 21 Mar 2019

Date Written: March 19, 2018

Abstract

Goodbye Washington Consensus? More than a decade has passed since economists and policy makers have claimed that the attempt to prescribe a set of measures and policies that will enhance economic development, known as the Washington Consensus, was doomed to failure and is no longer relevant. This paper demonstrates that the Washington Consensus is in fact enforced on states through the interpretation and application of international investment agreements (IIAs), and specifically the fair and equitable (FET) standard. Using an innovative empirical analysis of all public investment arbitration awards published until 2015 in which FET claims are discussed (N=120), the results presented here infer that cases involving measures inconsistent with the Washington Consensus have up to a 45 percent higher chance of being found in violation of FET than other cases (p<.01). A more nuanced analysis that examines the role of specific measures in the outcomes of FET claims, found that only cases involving measures that are inconsistent with the Washington Consensus have a statistically significant higher chance of being found in violation of FET compared to other cases. These findings provide a novel empirical basis for legal professionals and practitioners wishing to understand which measures are unlikely to prevail in investment disputes in the current setting. As tribunals still interpret and implement IIAs in line with the Washington Consensus, it seems that unless IIAs are substantially amended – its effects are here to stay.

Keywords: ISDS, Investment arbitration, Washington Consensus, BIT, International investment agreement, regulatory chill, fair and equitable treatment, FET

Suggested Citation

Chriki, David, Is the Washington Consensus Really Dead? An Empirical Analysis of FET Claims in Investment Arbitration (March 19, 2018). 41 Suffolk Transnational Law Review 291 (2018), Available at SSRN: https://ssrn.com/abstract=3144386

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
87
Abstract Views
471
Rank
523,966
PlumX Metrics