Revising neo-liberalism in international law: indirect expropriation and norm change

This article zooms in on the rather unexplored history of indirect expropriation in international investment law. It argues that two major shifts have taken place in its evolution since its inception around 1917. The first concerns its transition, throughout the 1960s and 1970s, from a residual norm protecting investors while accommodating the right of states to pursue public interest, to a markedly neoliberal device providing a considerably higher level of protection for investors. The second shift, around 2000, marked the return to a moderately statist paradigm, largely under the idea of police powers. The article uses this historical reconstruction to reflect on the dynamics of norm change in international investment law and in international law more generally. It suggests four theoretical factors recognizable in the trajectory of indirect expropriation and arguably central in the evolution of any international rule: norm instability, low institutional authority, the interests of powerful states, and public oversight.