Document Type


Publication Date

Winter 2016

Publication Citation

23 Indiana Journal of Global Legal Studies 95 (2016)


This paper examines the changing boundaries of statehood resulting from transformations in the nature and operation of public and private authority over local and global politico-legal orders. Transformations in the political purposes of states are being driven by powerful elites who advance a new form of constitutional governance. New constitutionalism, as evidenced by the investor-state regime, subordinates the interests, purposes, and rights of national citizens to those of foreign, transnational politico-legal, and economic elites. This regime is a highly privatized order that is expanding in influence, both in terms of the commercial activities under its remit, and in terms of its procedural operation and its normative influence. The specific focus of this paper is on the investor-state regime, which is contributing to the expansion of private power and authority in the settlement of investment disputes. This regime is effecting two transformations in the scope and nature of statehood. One transformation involves the imposition of severe limits upon the legislative and policy autonomy of national governments that are being developed and enforced by private commercial actors without public accountability. In agreeing to protect the private property rights of foreign investors against legislation or public policy that might impair foreign investment, states are also limited in their abilities to ensure the protection of the social, economic, or human rights of their peoples. However, this expansion of private power and authority is generating a countermovement in the form of resistance to the regime. This resistance is giving rise to a conflicting transformation in statehood as national governments seek to regain their policy and legislative autonomy. In some cases, the impetus comes from local sources, while in others it emanates from global and international human rights fora. This paper begins with an overview of the operational nature of the investor-state regime and new constitutionalism, revealing how the procedural and substantive provisions of the regime reach deep inside states to set clear limits on their legislative and policy autonomy. It then examines a selection of cases before investor-state tribunals that reveal contestation and resistance to the regime through the reassertion by state governments of their sovereignty and through the influence of international human rights. It concludes with an exploration of the potential for this regime to advance human rights protections and suggests a few changes that might enhance the regime's democratic legitimacy.