Working Paper No. 1248

Investor-State vs. State-State Dispute Settlement

Published: November 14, 2018, revised February 2019Pages: 34Keywords: ISDS; Expropriation; International investment agreements; Regulatory chillJEL-codes: F21; F23; F53; K33

Investor-State vs. State-State Dispute Settlement Henrik Horn


International investment agreements have provoked intense criticism in the policy debate during recent years. Particularly contentious has been their “ISDS” mechanisms, which enable investors to bring disputes against host countries. This paper examines whether host countries would be better off with state-state dispute settlement (SSDS), as often alleged, assuming that SSDS cause political/diplomatic arbitration costs that are not present with ISDS.

Two separate reasons why host countries might benefit from SSDS are identified, but neither provides a convincing argument for host countries to move to SSDS. The paper concludes that host countries should reduce the stringency of their agreements, rather than introduce imperfections in the dispute settlement systems to reduce their bite.​

Henrik Horn

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henrik.horn@ifn.se

Global index of the sharing economy

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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.

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