Foreign Investment in Latin-America: Between Love and Hatred

The political independence of Latin-American countries from European colonial powers, and particularly from the Spanish empire, in the early 19th century, signaled the beginning of another important struggle, namely the quest for economic emancipation. Much like the quest for political independence, the fight for economic emancipation was carried out on many fronts, including the front of ideas. Within the intellectual front itself, one of the most important struggles took place in the arena of legal concepts, and more specifically, in connection with the protection of the economic interests of aliens residing in the newly independent countries. The purpose of this article is to shed light on such struggle through a concise analysis of its legal manifestations over time. We focus on two types of legal concepts. The first concerns the methods for solving investment conflicts, such as diplomatic consultations, submission to a judicial body or armed intervention. The second relates to the rules potentially applicable to solve such disputes, which may be derived from the municipal law of the investor’s home State or from the host State’s legal system or, still, from international law. The evolution of these two types of concepts is analyzed by reference to four historical phases. These phases must be understood as analytical categories rather than as historical processes, as neither such processes nor the evolution of legal concepts have followed a clear-cut trajectory. They remain however useful analytical tools in order to understand the evolution of the legal concepts governing foreign investment as well as, more generally, to grasp the realities underlying such legal developments.