The Sociology of International Investment Law

Abstract

Sociologists of law have long emphasized that law is rooted in communities, and laws are considered by these scholars as expressive types of those communities. Sociological analysis casts new light on a significant dimension of international law and enriches our understanding of social factors involved in the creation, interpretation and implementation of international rules. While sociological literature provides valuable tools for analyzing various international legal topics, it does not aim to substitute rational, political or other analyses but rather to complement them. This chapter aims to present the sociological perspective on international investment law and illustrate its practical value with regard to two significant topics in contemporary investment law: the application of human rights law to investment disputes and "precedent" in investment tribunals' jurisprudence. Section II briefly exposes the central tenets of the sociological perspective and discusses its relevance to international economics, particularly foreign investment relations. Section III briefly delineates the features of the investment community. Sections IV and V illustrate the scholarly and practical value of the sociological perspective by an analysis of two prominent questions in contemporary international investment law. Section IV presents a sociological analysis of the interaction between international investment law and human rights law. The principal argument here is that the socio-cultural distance between the particular branches of international law affects the inclination of relevant decision-makers to incorporate or reject legal rules developed in other branches of international law. Section V addresses the issue of "precedent". Investment tribunals' tendency to follow a series of consistent rulings by other investment tribunals is linked to the concepts of social norms, social control and conformity in the investment arbitration community, as well as the particular role of the influential core-group of frequent arbitrators in the investment social network. Investment tribunals' inclination to accept rulings of the International Court of Justice is linked to the concepts of social status and reference group in sociological literature. Section VI concludes that sociological literature is a valuable tool that broadens our understanding of the social factors involved in the creation and implementation of international investment law, and may bear implications for policy-making as well.