Investment: Contestation and Transformation

At first glance, the governance of foreign direct investment (FDI) is a graveyard for multilateral cooperation. Describing or analysing a “global investment regime” has long seemed more fantasy than reality. Keohane and Ooms observed in 1975 that: “Writing about alternative international regimes to deal with direct foreign investment may seem to be somewhat like discussing a perpetual motion machine: most people would like one for their own purposes; no one has ever built one; and discussions about their construction often take on a certain air of unreality.” Today, 40 years later, there is still no international organization mandated with the governance of direct investment. The repeated negotiating failures and absence of formal organization-building in the postwar period gives the governance of direct investment a different trajectory than most issue areas discussed in the original Gridlock volume. Direct investment is not a new phenomenon – flows of FDI have been high throughout the postwar period. Yet formal multilateral cooperation did not succeed in creating a dedicated organization or core convention to govern those flows in the immediate postwar era, unlike the pattern observed in other issue areas and described in Gridlock.