Anne van Aaken

Behavioral International Law and Economics

Whereas the rational choice approach to international law has been widely accepted in legal scholarship and international relations theory, challenges to the rational choice paradigm in economic analysis of international law have hitherto not been systematically explored. Nevertheless, behavioral law and economics and psychology have been successfully applied to national law constellations. Behavioral economic insights have furthermore been used in international relations scholarship under the heading of political psychology but international norms are neglected. Building on all those insights, the article explores the potential and challenges of extending the behavioral law and economics approach to public international law and thus to further refine our understanding of international law. It looks specifically at treaty design problems and compliance questions. This ties in with increased use of empirical research in international law: a clear desideratum for evidence-based international law.

Effectuating Public International Law through Market Mechanisms

Traditionally, the enforcement of public international law (PIL) was a task of states: its addressees and its enforcers were states. That has changed recently. Whereas the influence of private market actors on the making of PIL has been extensively analyzed, their influence on its enforcement has been neglected, although the idea of using private interests in order to foster social goals has a long history. This article draws on theoretical insights of a rational-choice approach to PIL in order to analyze the prerequisites of effectuating PIL through privatemarket-actor incentives and market mechanisms.

Making International Human Rights Protection More Effective: A Rational-Choice Approach to the Effectiveness of Ius Standi Provisions

Empirical research shows that international human rights law is to a large extent ineffective. Individual complaint mechanisms are the only significantly effective enforcement mechanism. Certainly many variables influence the success of enforcement through judicial or quasi-judicial mechanisms but one important variable is the provisions of ius standi, as they have a gate-keeping function. International human rights law can be rendered more effective if individual victims have both de jure and de facto access to its remedies. This article analyzes the different incentives provided by complaint mechanisms for individuals, groups or NGOs to make use of international human rights bodies. They are such, that an insufficient enforcement of IHRL can be expected.

Trust, Verify or Incentivize? Effectuating Public International Law Regulating Public Goods Through Market Mechanisms

Traditionally, the enforcement of public international law (PIL) was a task of states: its addressees and its enforcers were states. That has changed recently. Whereas the influence of private market actors on the making of PIL has been extensively analyzed, their influence on its enforcement has been neglected, although the idea of using private interests in order to foster social goals has a long history. This article draws on theoretical insights of a rational-choice approach to PIL in order to analyze the prerequisites of effectuating PIL through private-market-actor incentives and market mechanisms, with a special view to International Public Goods and Commons.

Perils of Success? The Case of International Investment Protection

Foreign direct investment forms an ever more important part of globalised market structures, and international investment law has become one of the most successful and judicialised areas of public international law. In order to attract investment, States commit themselves to treaties that restrict their regulatory sovereignty in ways that are sometimes unpredictable, owing to vague terms in the treaties and the broad use by investment tribunals of their delegated discretion.This article uses economic contract theory in order to understand whether the commitment problem ex ante and the flexibility problem ex post are optimally solved. It is hypothesised that the participation constraints on States may be overlooked by investment tribunals, thereby leading to an undesired weakening of protection of investors in the long run due to reactions by States. First, States may opt out of the system, for example by exiting treaties or by non-compliance. Second, they may also water down the substantive or procedural protections. Third, whereas investment treaties were seen in the beginning as a restraint on developing countries, investment increasingly flows to equally highly regulated developed countries. As legal protection is reciprocal but the capital flows used to be unilateral, developed countries might also react to their restriction of sovereignty, as the United States has already done, for example. These perils could lead to a backlash in international investment protection of which indications are already visible.

Smart Flexibility Clauses in International Investment Treaties and Sustainable Development

A major challenge for investment treaty designers and adjudicators is to separate opportunistic behavior by host states that should be sanctioned under international law from bona fide public policy measures that should not. This article suggests that international investment agreements (iias) need to be both ‘smarter’ and more ‘flexible’ to better make that distinction. It draws on economic contract theory as a basic framework, and political economy theory for fine-tuning.

Smart Flexibility Clauses in International Investment Treaties and Sustainable Development: A Functional View

The discussions about International Investment Law (IIL) are slowly catching up with the discussions about international trade law in two respects: the first is the social science, especially economic, enrichment of the legal discourse, the second is the discussion on fragmentation of international investment law, that is ‘investment and…’ issues. The topic of this book is a fragmentation issue, namely “investment and sustainable development (SD)�?. This article addresses this topic in two specific ways: firstly, it draws on diverse economic insights to analyze the problem trying to give meaningful insights to treaty negotiators and interpreters and, secondly, it concentrates on the contribution of flexibility clauses in solving ‘investment and…’ issues by proposing ‘smart’ flexibility clauses. The big problem to solve for treaty-designers and adjudicators is to separate opportunistic behavior of states from legitimate policies for SD of host states being pursued by them. This article contributes a procedural and substantive check-list to separate opportunistic behavior of states from good faith regulation which, in my view, should be allowed. In other words, the article is about smart flexibility mechanisms. In order to develop a frame for solving this problem, this article draws on the economic theories of contract theory (as a basic frame) and political economy theory (for fine-tuning) in order to understand when a host state’s behavior has to be sanctioned and when not. It will then take stock of what kind of flexibility clauses exist in IIAs de lege lata in order to ask whether those clauses allow for a systematic distinction between opportunistic behavior and good faith behavior of states. This part highlights methodological and substantive tools which may be used in order to make this distinction easier. The last part concludes with a view on SD and investment treaties.

Opportunities and the Limits of an Economic Analysis in International Law

Abstract The paper investigates the opportunities and the limits of economic analysis in international economic law. Based on a legal theory approach, it highlights the different epistemological statements in law and explores where and how social sciences, and especially economics, may play a role in law-making (external view) and law-application (internal view). International Economic Law is in special need of economic insights (economics as a subject-matter). Economics as a methodology (and its empirical insights) can also be used to explain noneconomic issues in international economic law, such as treaty negotiations. Examples from trade and investment law highlight the need for economic analysis in international economic law as well as its limitsThe paper investigates the opportunities and the limits of economic analysis in international economic law. Based on a legal theory approach, it highlights the different epistemological statements in law and explores where and how social sciences, and especially economics, may play a role in law-making (external view) and law-application (internal view). International Economic Law is in special need of economic insights (economics as a subject-matter). Economics as a methodology (and its empirical insights) can also be used to explain noneconomic issues in international economic law, such as treaty negotiations. Examples from trade and investment law highlight the need for economic analysis in international economic law as well as its limits.

SYMPOSIUM ON CRITICAL INFRASTRUCTURES: RISK, RESPONSIBILITY AND LIABILITY ∙ State Liability and Critical Infrastructure: A Comparative and Functional Analysis

Critical Infrastructure (CI) provision is characterized by privatization of CI providers, transnational risks and a changing role of the state. We describe two paradigmatic systems of state liability with a view to CI liability, namely Germany as a fault system and Switzerland as a strict liability system. Both are unsatisfactory and not well adapted to the modern realities and exigencies of allocation of risks and liability in CI and show flaws from a functional, incentive-based perspective. Therefore, we make suggestions how those systems may be ameliorated, suggesting organizational, design and supervisory liability reforms.

Die vielen Wege zur Effektuierung des Völkerrechts

Einleitung . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A. 227 Theorienpluralismus zur Erklarung der Befolgung des Volkerrechts . . . . . . . . . . . . B. 230 Definition(en) der Befolgung des Volkerrechts . . . . . . . . . . . . . . . . . . . . . . . . . . . I. 230 Rationale Wahl vs. Konstruktivismus? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. 234 Reziprozitat, Reputation und Retaliation: die Problemfelder . . . . . . . . . . . . III. 239 Klassische Mechanismen zur Effektuierung des Volkerrechts . . . . . . . . . . . . . . . . . . . C. 244 Zentrale Durchsetzung des Volkerrechts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I. 244 Dezentrale Durchsetzung auf internationaler Ebene . . . . . . . . . . . . . . . . . . . . . . II. 246 Internationale Streitbeilegungsmechanismen .. . . . . . . . . . . . . . . . . . . . . 1. 246 Ausergerichtliche Streitbeilegungsmechanismen .. . . . . . . . . . a) 246 Zwischenstaatliche gerichtliche Verfahren . . . . . . . . . . . . . . . . . b) 247 Verfahren mit Individuen . . . . c) 249 Monitoring und Reporting . . . . . . 2. 251 Staatenverantwortlichkeit . . . . . . . 3. 252 Verlinkung von Vertragen . . . . . . . 4. 253 Dezentrale Durchsetzung auf nationaler Ebene . . . . . . . . . . . . . . . . . . . . . . . . . . . . III. 254 Nationale Gerichte . . . . . . . . . . . . . . . 1. 254 Nationale politische Prozesse . . . . 2. 255 Transnationale Mechanismen zur Effektuierung des Volkerrechts . . . . . . . . D. 257 Nutzung des Marktmechanismus: Konsumentenpraferenzen . . . . . . . . . . . . I. 258 Marktmechanismus: Netzwerkexternalitaten . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II. 260 Ausblick: Eine Skizze von Bauprinzipien zur Effektuierung des Volkerrechts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E.