ABSTRACT
This chapter explores investor-state arbitration (ISA) as a form of private contractual governance that now plays a crucial role in the construction of public and private power in the contemporary transnational political economy. It then argues that ISA works to insinuate private contractual power into the forms through which states attempt to regulate private investment activity, in ways that structure and limit the options available for any regime of global investment governance. This argument is based on a broader contention that private contracting practices now sit at the intersection between the freedom of transnational commercial actors to structure their relationships and the state-based legal orders that empower and limit this freedom. As the example of investor-state arbitration demonstrates, the contestations embedded in contractual practice and governance are central to the definition of the scope of state power and its relationship to private power in the contemporary global political economy.
