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Department of Politics and International Studies

Politcal Economy of the International Investment Regime

Course Code:
153400080
Status:
Course Not Running 2014/2015
Unit value:
0.5
Year of study:
Year 3
Taught in:
Term 2

This course will introduce students to the political economy of the international investment regime. The first part will focus on the importance of multinational corporations in the global economy and the regulatory challenges associated with the rise of foreign direct investment. Why, and how, do firms and other actors invest abroad? Which functions do foreign investors play for home and host states? What is the role of national policies and institutions in attracting foreign investment?

The second part will consider the impact of foreign investment. Under what conditions does foreign investment contribute to economic development? Are multinational corporations always attracted to lax labor and environmental standards? Are sovereign investors - such as state-owned enterprises and sovereign wealth funds - politically motivated when investing abroad? How can states welcome foreign investment without sacrificing national security interests? In short; what is the relationship between foreign investment and national sovereignty?

Finally, students will be provided with a basic working knowledge of the law, economics, and politics of the most important international regulatory arrangements governing foreign investment protection: investment treaties. Are investment treaties effective in protecting foreign investors from political risks? Why have developed and developing countries signed the treaties, and what have been the political and economic costs and benefits?

The course will make extensive use of case-studies and provide students essential knowledge to contextualize current debates on the relationship between international investment, multinational corporations, and national governments.

Course outline:
  1. Introduction: Why foreign investment?
  2. Political economy of foreign investment
  3. Foreign investment and development
  4. Foreign investment and the environment
  5. Foreign investment and security
  6. Protecting of foreign investment from political risks
  7. Investment treaties and investment treaty arbitration
  8. Politics of investment treaties in home states
  9. Politics of investment treaties in host states
  10. Legitimacy and governance challenges of the international investment regime

Objectives and learning outcomes of the course

At the end of this course, a student should be able to demonstrate

  • An understanding of the economic and political drivers of foreign direct investment
  • Careful examination of the impact of foreign direct investment on home and host states
  • Knowledge of significant legal, economic, and political aspects of the international investment regime

Method of assessment

Assessment is 90% coursework and 10% seminar presentation.