Broude, Tomer, and Yoram Z. Haftel. Forthcoming. “The Growing Pains of Actorness: The European Union in Global Investment Governance”. Journal of European Integration .Abstract


Foreign investment is governed by thousands of international investment agreements (IIAs), many of which include investor-state dispute settlement (ISDS) provisions. Member states have played a prominent role in the evolution and shape of this decentralized global investment regime. The EU itself has become a player in this regime since gaining competency in this area in 2009. This article examines the manners by which investment policies of the EU and its member states have evolved over time and their implications for the EU’s actorness. Using, first, the concept and metric of state regulatory space, we show that the EU is more enthusiastic than its member states about reforms, but that a lack of internal cohesiveness and a competitive external environment limit its actorness. Second, drawing on recent discussions of ISDS reforms, we highlight the increasing ability of the EU to speak up with one voice on global investment rules.  


Haftel, Yoram, Soo Yeon Kim, and Lotem Bassan-Nygate. 2022. “High-Income Developing Countries, FDI Outflows and the International Investment Agreement Regime”. World Trade Review 21 (1) : 1-17. Publisher's VersionAbstract

The international investment agreement regime (IIA Regime) is composed of thousands of IIAs and a system of investor–state dispute settlement. Historically, high-income developing countries (HIDCs) were part of the global South and thus ‘hosts’ of foreign direct investment (FDI). Increasingly, however, these countries have become ‘home’ to investors who are hosted and exposed to political risk abroad. Representing both home and host country interests simultaneously, how do HIDCs balance these crosscutting pressures? We argue that as the position of an HIDC shifts from mostly a recipient towards a sender of significant amounts of FDI, it will be more willing to provide protection to foreign investors at the expense of state regulatory space in its IIAs, thereby increasing its exposure to the IIA Regime. Employing an original data set that measures this exposure for sixty-four HIDCs over six decades, we first show that the degree of HIDC exposure to the IIA Regime varies a great deal. Using a general method of moments (GMM) analysis and controlling for a host of confounding factors, we demonstrate that, indeed, higher levels of FDI outflows as a share of the national economy result in greater exposure to the IIA Regime.

Haftel, Yoram Z., and Tobias Lenz. 2022. “Measuring Institutional Overlap in Global Governance”. The Review of International Organizations 17 (2) : 323-347. Publisher's VersionAbstract


Over the past decade, an increasingly sophisticated literature has sought to capture the nature, sources, and consequences of a novel empirical phenomenon in world politics: the growing complexity of global governance institutions. However, this literature has paid only limited attention to questions of measurement, which is a prerequisite for a more comprehensive understanding of global governance complexity across space and time. In taking a first step in this direction, the present article makes two contributions. First, we propose new quantitative measures that gauge the extent of complexity in global governance, which we conceptualize as the degree to which global governance institutions overlap. Dyadic, weighted, directed-dyadic, and monadic measures enable a multifaceted understanding of this important development in world politics. Second, we illustrate these measures by applying them to an updated version of the most comprehensive dataset on the design of intergovernmental organizations (IGOs): the Measure of International Authority (MIA). This allows us to identify cross-sectional and temporal patterns in the extent to which important IGOs, which tend to form the core of sprawling regime complexes in many issue areas, overlap. We conclude by outlining notable implications for, and potential applications of, our measures for research on institutional design and evolution, legitimacy, and legitimation, as well as effectiveness and performance. This discussion underscores the utility of the proposed measures, as both dependent and independent variables, that allow researchers to examine the sources and consequences of institutional overlap in global governance and beyond.


Ariel, Jonathan, and Yoram Z. Haftel. 2021. “Mostly in Its Backyard: Security Provisions in EU Economic Agreements”. JCMS: Journal of Common Market Studeis 59 (6) : 1419-1437. Publisher's VersionAbstract

Economic agreements concluded between the EU and third parties increasingly take on security matters, such as counter‐terrorism, nuclear proliferation and international criminal law. Highlighting the remarkable variation in the presence and content of these security non‐trade issues (SNTIs), we argue that it is best explained by the EU's intensity of foreign policy interests vis‐à‐vis its partners. Specifically, different stakeholders have divergent views on this matter: some advocate strong linkage between trade and security, while others prefer to tackle these issues separately. We expect the former perspective to determine the content of economic agreements when the partner is in the EU's backyard. The latter perspective will dominate in negotiations with more distant partners. We test these expectations with a new data set of SNTIs in EU agreements. Employing quantitative methods and controlling for several alternative explanations, we find ample support for the theoretical framework.

Economic agreements concluded between the European Union (EU) and third parties increasingly take on security matters, such as counter-terrorism, nuclear proliferation, and international criminal law. Highlighting the remarkable variation in the presence and content of these security non-trade issues (SNTIs), we argue that it is best explained by the EU’s intensity of foreign policy interests vis-à-vis its partners. Specifically, different stakeholders have divergent views on this matter: some advocate strong linkage between trade and security, while others prefer to tackle these issues separately. We expect the former perspective to determine the content of economic agreements when the partner is in the EU’s backyard. The latter perspective will dominate in negotiations with more distant partners. We test these expectations with a new data set of SNTIs in EU agreements. Employing quantitative methods and controlling for several alternative explanations, we find ample support for the theoretical framework. 


Haftel, Yoram Z., and Morr Link. 2021. “Islamic Legal Tradition and the Choice of Investment Arbitration Forums”. Review of International Political Economy 28 (3) : 559-583. Publisher's VersionAbstract


Does domestic legal tradition affect international cooperation and legalization? Recent studies indicate that states with Islamic law tradition (ILT) prefer more informal forums to resolve international disputes, compared to states with other legal traditions. We examine this claim in the context of the increasingly important global investment regime. We argue, specifically, that international investment agreements (IIAs) concluded by ILT states are less likely to refer disputes to the highly legalized and formal Centre for the Settlement of Investment Dispute (ICSID), and are more likely to refer them Islamic forums, which tend to be less formal. Employing new data on forum choice in investor-state dispute settlement (ISDS) provisions in more than 2,600 IIAs and controlling for a battery of alternative explanations, we find substantial empirical support for the theoretical expectations. These findings underscore the significance of domestic legal traditions to international dispute settlement in the Islamic world and beyond.


Chriki, David, Tomer Broude, and Yoram Haftel. 2021. “International Investment Agreements and their Impact on State Regulatory Space: The Case of Israel (in Hebrew)”. Haifa Law Review (Mishpat U’Memshal) 22 : 133-161. Publisher's VersionAbstract

International investment agreements (IIAs) are a significant manifestation of the impact of legal globalization on national public policy. These are thousands of (mostly) bilateral treaties through which states commit to protect the rights of foreign investors. Moreover, these obligations can be enforced by a system of binding international investor-state dispute settlement (ISDS), which allows investors to file claims against host countries that allegedly violated their obligations under their IIAs. The legitimacy of IIAs and ISDS is highly contested, however. On the one hand, they encroach on states’ regulatory space (SRS) and delegate legal authority to ad-hoc arbitration bodies, which lack transparency and accountability. On the other hand, their alleged positive effect on foreign investment is uncertain. As a party to about forty IIAs, Israel’s SRS is certainly affected by IIAs. Such potential impact came to the fore when an American company, Noble Energy, indicated that it might turn to ISDS against the Israeli government in relations to a disputed gas exploration project. This article examines the implications of IIAs and ISDS to SRS both globally and with respect to Israel. After elaborating on and illustrating these relationships in the global arena, we present a measure of SRS that facilitates a systematic comparison of IIAs across time and space on this key dimension. We show that, of late, states around the world conclude IIAs with greater regulatory space and that Israel tracks this global trend. A legal analysis of two investment disputes in the energy sector suggests that Israeli IIAs expose the country to costly ISDS claims and potentially limit its ability to regulate in important policy areas. We conclude that Israel will do well to sign or renegotiate IIAs with greater regulatory space. 

Broude, Tomer, Yoram Z. Haftel, and Thompson Alexander. 2021. “Legitimation Through Renegotiation: Do States Seek More Regulatory Space in Their BITs?”. In The Legitimacy of Investment Arbitration: Empirical Perspectives, , p. 531-554. SSRN VersionAbstract

Criticism of the effects of the international investment regime on state regulatory space (SRS) is on the rise, much of it focusing on the impact of binding arbitration. Specifically, the investor-state dispute settlement (ISDS) provisions found in most bilateral investment treaties (BITs) and other investment agreements have a profound effect on the balance between investor rights and state regulatory space (SRS), raising a debate on their legitimacy. We explore how states perceive the legitimacy of ISDS provisions in light of their experiences with the investment regime through the lens of BIT renegotiation and termination. Renegotiation provides an empirical window for understanding how dissatisfaction with BITs translates into concrete decisions by governments to recalibrate their treaty obligations, perhaps rendering them more legitimate. Based on an original data set comprised of 161 renegotiated agreements, we find that states have not made a systematic effort over the years to recalibrate their BITs for the purpose of preserving more regulatory space. In fact, most renegotiations either leave ISDS provisions unchanged or render them more investor-friendly. However, recent renegotiations show a greater tendency to limit investor protections in ISDS provisions.

Haftel, Yoram Z., Daniel F. Wajner, and Dan Eran. 2020. “The Short and Long(er) of It: The Effect of Hard Times on Regional Institutionalization”. International Studies Quarterly 64 (4) : 808-820. Publisher's VersionAbstract

What are the implications of hard economic times for regional economic cooperation? Existing research is sharply divided on the answer to this question. Some studies suggest that economic crises encourage governments to strengthen their regional institutions, but others indicate that they lead to decreasing investment in such initiatives. Both sides overlook the possibility that the passage of time conditions these relationships, however. We aim to bridge these opposing perspectives by distinguishing between short-term and long-term effects of economic hard times on institutionalized regional cooperation. We argue that in the short-term economic crises impede regional institutionalization due to protectionist pressures, nationalistic public sentiments, and political instability. This effect is reversed in the longer-term, as interest groups and the public adopt more favorable attitudes towards regional economic organizations (REOs) and governments employ these institutions to demonstrate their competence and to improve economic conditions. We evaluate this argument in relations to regional institutionalization, which refers to the functional scope and structure of REOs. Using a data set that contains information on this dimension for thirty REOs over four decades, we find strong support for the theoretical framework: regional institutionalization remains stagnant in the immediate aftermath of economic crises, but increases in subsequent years.

De Bruyne, Charlotte, Itay Fischhendler, and Yoram Z. Haftel. 2020. “Design and Change in Transboundary Freshwater Agreements”. Climatic Change 162 (2) : 321-341.Abstract

This paper presents a systematic assessment of transboundary water treaties and their institutional evolution over time. While the majority of treaties tend to remain unchanged, others are renegotiated over time, either gradually by treaty amendment or abruptly by treaty replacement. This study examines the sources of treaty amendment, treaty replacement, and renegotiation. Treaty design features, such as conflict resolution mechanisms and duration mechanisms, make up the set of independent variables. Effects are also measured for a set of control variables including the geographical configuration of a basin, the number of signatories, a history of interstate militarized disputes, water variability, the basin’s climate zone, and past renegotiations. Conflict resolution appears as a significant design feature for determining treaty stability, aided by asymmetrical basin configurations and bilateralism. The absence of conflict resolution is the main trigger for gradual change. The presence of a duration clause and a history of interstate militarized disputes are found to trigger abrupt change. Renegotiations become more likely after the first round of renegotiation, suggesting a temporal effect of path dependence on treaty evolution. This study adds to the work of scholars mapping transboundary basins at risk and provides further arguments to negotiate better and more specific treaties from the start, which include conflict resolution features that enable dialogue and rule modification while avoiding the need for formal treaty renegotiation.

Haftel, Yoram Z., and Hila Levi. 2020. “Argentina’s Curious Response to the Global Investment Regime: External Constraints, Identity, or Both?”. Journal of International Relations and Development 23 (4) : 755-780. Publisher's VersionAbstract

Costly investor-state dispute settlement (ISDS) cases have led several developing countries to take far-reaching steps to distance themselves from the global investment regime, such as the denunciation or renegotiation of international investment agreements (IIAs) or the withdrawal from the International Centre for Settlement of Investment Disputes (ICSID). Despite facing the highest number of investment claims worldwide and despite being very vocal about the shortcomings of the current regime, Argentina has neither denounced a single IIA nor renounced ICSID. This article addresses this puzzle. It first shows that under the Kirchners’ governments (2003‒2015), Argentina adopted a dual approach: maintaining its IIAs and membership in ICSID on the one hand, but vigorously fighting ISDS awards on the other. Using in-depth interviews, news reports, and secondary sources, it then demonstrates that this ‘neither-in-nor-out’ approach is best explained by a unique Argentinian identity, which combines Latin American and Western dimensions, conditioned by external political and economic constraints, especially in the immediate aftermath of the 2001 financial crisis. As such, this study underscores the need to account for both material and ideational factors when striving to grasp development-related foreign policy.

Haftel, Yoram Z. 2020. “BRICS and the Global Investment Regime”. In BRICS and the Global Economy, Singapore: World Press Publishing. SSRN VersionAbstract


What role do Brazil, Russia, India, China, and South Africa (BRICS) play in the global investment regime and what policies do they espouse? How can we account for similarities among and differences across these countries with respect to their approach to international investment agreements (IIAs) and investment arbitration? What are their implications for the future of this regime? This study addresses these questions by situating emerging market economies in the persistent North-South divide, that is endemic to the global politics of foreign direct investment (FDI). Surveying the policies of the five countries since the 1980s, it shows that all were initially motivated to provide foreign investors with protection against political risk in order to attract FDI. As their own position in the global economy has changed and the rules of the regime itself have evolved, the investment policies of the BRICS countries have transformed, albeit in distinct ways. China and, to a lesser extent, Russia appear broadly content with the current state of affairs. Brazil, India, and South Africa, on the other hand, seem to object to current rules, which they view as overly protective of foreign investors at the expense of host state regulatory space. I argue and show that two factors – the amount of FDI outflows and regime type – usefully account for the observed variation across BRICS' international investment policies, but that more research is needed to fully understand this matter. Regardless its sources, the diversity between the BRICS countries suggests that the prospects of them shaping the rules of the global investment regime, either individually or collectively, are rather bleak.  


Alexander, Thompson, Tomer Broude, and Yoram Z. Haftel. 2019. “Once Bitten, Twice Shy? Investment Disputes, State Sovereignty and Change in Treaty Design”. International Organization 73 (4). Publisher's VersionAbstract


More than 3000 international investment agreements (IIAs) provide foreign investors with substantive protections in host states and access to binding investor-state dispute settlement (ISDS). In recent years, states increasingly have sought to change their treaty commitments through the practices of renegotiation and termination, so far affecting about 300 IIAs. The received wisdom is that this development reflects a “backlash” against the regime and an attempt by governments to reclaim sovereignty, consistent with broader anti-globalization trends. Using new data on the degree to which state regulatory space (SRS) is restricted by IIA provisions, this article provides the first systematic investigation into the effect of ISDS experiences on state decisions to adjust their treaties. The empirical analysis indicates that, indeed, exposure to investment claims leads either to the renegotiation of IIAs in the direction of greater SRS or to their termination. This effect varies, however, with the nature of involvement in ISDS and with respect to different treaty provisions.


Haftel, Yoram Z., and Stephanie C. Hofmann. 2019. “Rivalry and Overlap: How Regional Economic Organizations Encroach on Security Organizations”. Journal of Conflict Resolution 63 (9) : 2180-2206. Publisher's Version
Economic Growth and the Institutionalization of Regional Economic Organizations
Haftel, Yoram Z., and Daniel F. Wajner. 2018. “Economic Growth and the Institutionalization of Regional Economic Organizations”. In The Relevance of Regions in a Globalized World: Bridging the Social Sciences-Humanities Gap, Routledge.Abstract

The design of current regional economic organizations (REOs) is remarkably diverse. Some REOs address numerous economic issues, while others have only limited mandates. Some REOs have an independent bureaucracy and a legalized dispute settlement mechanism, while others do not. What determines this institutional variation? Extant research alludes to the possibility that the member-states’ economic growth, or lack thereof, affects the prospects of cooperation through regional institutions. The nature of these relationships is contested, however. Some studies suggest that economic stagnation compels governments to strengthen their regional institutions, but others indicate that hard times lead to decreasing enthusiasm and investment in such initiatives. Systematic empirical evidence on the link between economic growth and REOs’ functions and structure is nevertheless scant. Using an original data set that contains detailed information on the economic activities and institutional structure of numerous REOs over three decades, this chapter presents one of the first systematic analyses of these relationships. Our findings indicate that economic growth is conducive to greater REO institutionalization

Haftel, Yoram Z., and Thompson Alexander. 2018. “When Do States Renegotiate Investment Agreements? The Impact of Arbitration”. The Review of International Organizations 13 (1) : 25-48.Abstract

Given that their main function is to forge durable commitments, it is notable that many international treaties change over time through the practice of renegotiation. While some agreements have remained intact after their initial conclusion, others are amended, updated, or replaced. Why are some international agreements renegotiated while others remain stable? This paper offers a systematic analysis of treaty renegotiation by presenting theoretical propositions and testing them in the context of bilateral investment treaties (BITs). We argue that states renegotiate when they learn new information about the legal and political consequences of their treaty commitments, and that such learning is most likely to take place when states are involved in investor-state dispute settlement cases. Employing an original data set on renegotiated BITs, we find robust empirical support for the learning argument. We conclude by discussing implications for the study of institutional change and the evolving investment regime.
Broude, Tomer, Yoram Z. Haftel, and Thompson Alexander. 2018. “Who Cares about Regulatory Space in BITs? A Comparative International Approach”. In Comparative International Law, Oxford: Oxford University Press. SSRN Version
Broude, Tomer, Yoram Z. Haftel, and Thompson Alexander. 2017. “The Trans-Pacific Partnership and Regulatory Space: A Comparison of Treaty Texts”. Journal of International Economic Law 20 (2) : 391-417. Publisher's VersionAbstract

The Trans-Pacific Partnership (TPP) agreement, signed in February of 2016, is an ambitious effort to set high standards on a ‘mega-regional’ level. This paper examines the TPP’s investment provisions with a focus on their most controversial dimension: the extent to which they constrain the ‘state regulatory space’ (SRS) of host states. We embrace the text-as-data approach by coding the TPP and other investment agreements among TPP parties on designed features related to SRS. The challenges presented by this coding exercise demonstrate some of the advantages of manual coding over automated methods when nuance and interpretation are required. With our data, we first compare the TPP to other agreements and find that it scores relatively high on SRS, although it falls within the range of existing agreements and does not seem to chart new territory in this regard. We then investigate which existing agreements are most similar to and dissimilar from the TPP with respect to SRS. Using regression analysis, we consider a number of factors to explain this variation and find that the TPP is most similar to agreements involving the United States, to agreements among Western Hemispheric countries, to other free trade agreements with investment chapters, and to more recent agreements. However, different factors seem to matter if we look only at provisions related to investor-state dispute settlement versus substantive provisions, implying that it is important to distinguish between the substantive and procedural dimensions of treaties.


Haftel, Yoram Z., and Stephanie C. Hofmann. 2017. “Institutional Authority and Security Cooperation within Regional Economic Organizations”. Journal of Peace Research 54 (4) : 484-498. Publisher's VersionAbstract

The proliferation of regional economic organizations (REOs) is a prominent feature of the contemporary international environment. Many of these organizations aspire to promote regional peace and stability. Some strive to promote these goals only through economic cooperation, while others have expanded their mandate to include mechanisms that address security concerns more directly. A glance at the security components of such organizations indicates that their purpose and design are very diverse. This article sheds light on the sources of this poorly understood phenomenon. Specifically, it argues that organizations that enjoy greater delegated authority are in a better position to expand their mandate into the security realm and to have more far-reaching agreements in this issue area. It then develops a metric that gauges the degree of security cooperation within REOs and presents a new dataset of numerous organizations on this institutional aspect. Employing this dataset in a rigorous statistical analysis and controlling for a host of alternative explanations, it demonstrates that, indeed, REOs with greater delegated authority develop deeper security cooperation.

Imitation and Innovation in International Governance: The Diffusion of Trade Agreement Design
Baccini, Leonardo, Andreas Duer, and Yoram Z Haftel. 2015. “Imitation and Innovation in International Governance: The Diffusion of Trade Agreement Design”. In Trade Cooperation: The Purpose, Design and Effects of Preferential Trade Agreements, Cambridge: Cambridge University Press. Publisher's Version
Trade Agreements, Violent Conflict and Security
Haftel, Yoram Z. 2015. “Trade Agreements, Violent Conflict and Security”. In Trade Cooperation: The Purpose, Design and Effects of Preferential Trade Agreements, Cambridge: Cambridge University Press. Publisher's Version