Introduction

Countries enter into international investment agreements (IIAs) with a view to enhancing their investment climate, attracting more and better quality foreign direct investment (FDI) and benefiting from capital inflows. IIAs can offer a series of benefits in this regard, not least by helping to promote a stable, predictable and transparent enabling framework for investment. However, realizing these potential benefits remains a challenge and host countries need to strike a delicate and complex balance between using IIAs for attracting FDI on the one hand, and preserving the flexibility needed for the pursuit of national development objectives on the other hand.

Related Subject(s): Economic and Social Development