Bounded Rationality and Economic Diplomacy by Lauge N. Skovga... - 9781107119536

Cambridge University Press

Bounded Rationality and Economic DiplomacyThe Politics of Investment Treaties in Developing Countries\nAuthor(s): Lauge N. Skovgaard Poulsen\nFormat: Hardback\nPublisher: Cambridge University Press, United Kingdom\nImprint: Cambridge University Press\nISBN-13: 9781107119536, 978-1107119536\nSynopsis\nModern investment treaties give private arbitrators power to determine whether governments should pay compensation to foreign investors for a wide range of sovereign acts. In recent years, particularly developing countries have incurred significant liabilities from investment treaty arbitration, which begs the question why they signed the treaties in the first place. Through a comprehensive and timely analysis, this book shows that governments in developing countries typically overestimated the economic benefits of investment treaties and practically ignored their risks. Rooted in insights on bounded rationality from behavioural psychology and economics, the analysis highlights how polic.