Concluding remarks

It is the very nature of IIAs to constrain the policy options available at the national level. Despite such constraints, host country governments in developed and developing countries alike have entered into an ever-increasing number of IIAs at the bilateral, regional and interregional levels. To a considerable degree, they have done so because they view IIAs as useful tools for enhancing domestic investment climates, for locking-in recently enacted (and typically liberalizing) policy reforms and for signalling the future direction of their investment policies. While legally binding obligations can indeed prove beneficial for consolidating ongoing reform efforts and for increasing the transparency and predictability of national investment regimes, IIAs have long recognized, in various forms, the need of host countries to preserve flexibility for putting in place national development policies.

Related Subject(s): Economic and Social Development