Working Paper No. 1140

Economics and Politics of International Investment Agreements

Published: November 18, 2016, revised August 28, 2017Pages: 66Keywords: Foreign direct investment; Expropriation; International investment agreements; Regulatory chillJEL-codes: F21; F23; F53; K33

Economics and Politics of International Investment Agreements Henrik Horn and Thomas Tangerås

Close to 2 700 state-to-state investment agreements (IIAs) worldwide protect foreign direct investment (FDI) against host country policies. We analyze the design and implications of protection against regulatory expropriations in IIAs, emphasizing the role of externalities from FDI, countries’ unilateral commitment possibilities, and the direction of investment ‡ows. We show e.g. that (i) simple compensation mechanisms found in IIAs have desirable efficiency properties; (ii) optimal agreements do not cause underregulation ("regulatory chill"); (iii) IIAs can have strong distributional effects by benefi…tting investors at the expense of the rest of society; and (iv) IIAs should go further than only to impose non-discrimination.

Henrik Horn


Ph: +46 8 665 4540

Thomas Tangerås


Ph: +46 8 665 4526
Mob: +46 70 727 5448

Global index of the sharing economy

Timbro SEI

2018 Bergh Funcke Wernberg - Timbro Sharing Economy Index-1fHemsidan.jpg

Andreas Bergh, IFN and Lund University, is one of the authors of this book. The Timbro Sharing Economy Index is the first global index of the sharing economy. The index has been compiled using traffic volume data and scraped data, and provides a unique insight into the driving factors behind the peer-to-peer economy.

About the book


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