Philosophical Correlation between Rational Design Theory and Model Bilateral Investment Treaties

Abstract

Model Bilateral Investment Treaties have grown parallel to the evolution of Bilateral Investment Treaties; however, little importance have been given to the theoretical premise of the treaty design and raison d’ être for framing Model Bilateral Investment Treaties. Even the 2001 project on Rational Designing of International Institution, which discussed theoretical premise of participation of States while concluding international agreements, limited the study to the multilateral agreements, and left out bilateral agreements. However, it could be seen that the modern BIT regime, since its inception, was mounted upon the idea of need. On one hand States needed to import capital for economic development, on the other hand the States needed protection for the investments. Thereby making the regime based only on certain rationales. The development and transitions of Bilateral Investment Treaties and Model Bilateral Investment Treaties evidences the philosophy of Rational Design Theory. The Treaty practice may on occasion do not reflect rational measures, however, the form the philosophical standpoint it does.