Empowering Non-State Actors to Protect the Status Quo Suzanne Katzenstein

271 Pages·2013·1.45 MB·English

by  Suzanne Katzenstein

WHY SURRENDER SOVEREIGNTY?

Empowering Non-State Actors to Protect the Status Quo

Suzanne Katzenstein

Submitted in partial fulfillment of the
requirements for the degree of
Doctor of Philosophy
In the Graduate School of Arts and Sciences

COLUMBIA UNIVERSITY

2013
© 2013
Suzanne Katzenstein
All rights reserved
ABSTRACT
WHY SURRENDER SOVEREIGNTY?
Empowering Non-State Actors to Protect the Status Quo

Suzanne Katzenstein

Why do states create new judicial tools that severely limit or altogether undermine their
sovereignty? Why do some states choose, moreover, to become leading innovators, adopting these
new types of enforcement mechanisms significantly earlier than their peers? This dissertation
focuses on the creation of investor-state arbitration provisions in Bilateral Investment Treaties
(BITs) and the establishment of the International Criminal Court (ICC), especially its independent
prosecutor provision. For all their differences, investor-state arbitration provisions and the ICC
share three institutional features that, in combination, pose unprecedented constraints on state
sovereignty: they are judicial, they entail compulsory jurisdiction, and they grant non-state actors –
private investors or an independent prosecutor – the authority to initiate legal proceedings against
states and state officials.
The introduction of transnational and supranational judicial mechanisms is a strategy of the
strong, not the weak. Contingent on the mobilization of transnational advocacy networks, powerful
states turn to sovereignty-constraining tools in response to two core features: an international legal
crisis and a relatively empty international judicial landscape. In the aftermath of legal crisis, the
creation of sovereignty-constraining tools helps powerful states both to increase the efficacy of legal
rules that have been challenged and to validate the authority of legal rules that have been
undermined. This argument is counter-intuitive: powerful states turn to costly new judicial
mechanisms not to transform but to protect the status quo. To advance this claim I examine both
failed and successful attempts at creating novel judicial mechanisms in investment and international
criminal law across the twentieth century. I use qualitative and historical analysis at the global level
and statistical cross-national analysis at the state level.
In the case of BITs, developing countries in the 1970s expropriated foreign property on a
large scale and challenged traditional investment rules in the United Nations, thus triggering a crisis
for the investment regime. In response, powerful states turned to investor-state arbitration
provisions, not simply the BITs themselves, as a strategy to protect the existing regime. In the case
of the ICC, Nazi Germany’s territorial aggression and the 1990s mass atrocities in the former
Yugoslavia and Rwanda prompted legal crises for the territorial integrity principle and the human
rights regime respectively. Seeking to bolster territoriality and human rights, powerful states
experimented with the establishment of a criminal court. They failed in the 1950s and succeeded in
the 1990s.
Transnational Advocacy Networks (TANs) were of critical importance. Their interactions
with states were reciprocal and strategic. TANs invented and promoted the two forms of judicial
mechanisms at the global level, thus influencing state receptivity; they also molded their strategies
and substantive goals to suit state preferences.
A discussion of the effects that crisis and transnational advocates have on the creation of
investor-state arbitration provisions and the ICC yields new insights into existing scholarship on
transnationalism, credible commitment, legalism, and rational design. This analysis, moreover, has
broad implications for our understanding of the forces that can lead to profound political and legal
change.
TABLE OF CONTENTS
CHAPTER 1 .................................................................................................................................. 1
INTRODUCTION ...................................................................................................................... 1
CREATING SOVEREIGNTY-CONSTRAINING JUDICIAL MECHANISMS ....................................... 2
INVESTOR-STATE ARBITRATION AND THE ICC IN HISTORICAL PERSPECTIVE ...................... 5
INTERNATIONAL LEGAL CRISIS .............................................................................................. 7
ROAD MAP .............................................................................................................................. 9
CHAPTER 2 ............................................................................................................................... 12
CREATING SOVEREIGNTY-CONSTRAINING MECHANISMS TO PROTECT THE STATUS QUO .. 12
CREATING NEW-STYLE JUDICIAL MECHANISMS ................................................................... 14
The Foundational Premise of Power .................................................................................................... 14
The International Legal Crisis Argument ............................................................................................ 18
Transnational Advocacy Networks ....................................................................................................... 32
ALTERNATIVE EXPLANATIONS ............................................................................................. 37
Credible Commitment ............................................................................................................................ 38
Legalist States ........................................................................................................................................... 40
Competing or Complementary Explanations? .................................................................................... 43
SUMMARY .............................................................................................................................. 45
Recapitulation........................................................................................................................................... 45
Methodology and Case Selection .......................................................................................................... 47
CHAPTER 3 ............................................................................................................................... 51
INVESTMENT VULNERABILITY AND THE TURN TO .............................................................. 51
INVESTOR-STATE ARBITRATION ........................................................................................... 51
CASES .................................................................................................................................... 53
THEORETICAL EXPECTATIONS ............................................................................................. 58
International Legal Crisis ........................................................................................................................ 58
Transnational Advocacy Networks (TANs) ........................................................................................ 64
Credible Commitment ............................................................................................................................ 65
ANALYSIS ............................................................................................................................... 68
Timing of Investor-State Arbitration ................................................................................................... 68
Content of Hard BITs ............................................................................................................................ 90
Innovators ................................................................................................................................................ 96
Explaining the Failed MAI (1990s) .................................................................................................... 101
CONCLUSION ...................................................................................................................... 104
CHAPTER 4 ............................................................................................................................. 109
THE COSTS OF CRISIS: WHY SOME STATES EMERGE AS INNOVATORS ................................ 109
THEORETICAL EXPECTATIONS ABOUT THE MOTIVES OF INNOVATORS .............................. 110
Defining Innovators ............................................................................................................................. 110
Capital Exporters .................................................................................................................................. 111
Capital Importers .................................................................................................................................. 119
Controls ................................................................................................................................................. 123
DEPENDENT VARIABLE, SAMPLES AND STATISTICAL MODELS ........................................... 124
FINDINGS: LEGAL CRISIS PERIOD ....................................................................................... 127
Probit Estimation for the Crisis Period (1968-1980) ...................................................................... 127
Two-Stage Heckman Selection Model .............................................................................................. 133
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ROBUSTNESS CHECKS ......................................................................................................... 140
Random Sampling and Additional Controls .................................................................................... 141
Cut-Off Points ...................................................................................................................................... 142
CONCLUSION ...................................................................................................................... 153
CHAPTER 5 .............................................................................................................................. 161
TERRITORIAL INSECURITY, MASS ATROCITY, AND THE ICC ............................................... 161
CASES .................................................................................................................................. 163
THEORETICAL EXPECTATIONS ........................................................................................... 167
International Legal Crisis ..................................................................................................................... 167
Transnational Advocacy Networks (TANs) ..................................................................................... 173
Legalism ................................................................................................................................................. 173
ANALYSIS ............................................................................................................................. 176
The 1950s Criminal Court and Its Antecedents ................................................................. 176
Timing .................................................................................................................................................... 176
Content of the Hard BITs ................................................................................................................... 189
Innovators ............................................................................................................................................. 200
THE 1998 ROME STATUTE ................................................................................................... 210
Timing .................................................................................................................................................... 210
Content of the Rome Statute .............................................................................................................. 221
CHAPTER 6 ............................................................................................................................. 230
CONCLUSION ...................................................................................................................... 230
RECAPITULATION ............................................................................................................... 230
REFLECTIONS ON EXISTING SCHOLARSHIP ........................................................................ 239
BROADER IMPLICATIONS .................................................................................................... 246
BIBLIOGRAPHY ....................................................................................................................... 249

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List of Tables and Figures
Figure 2-1: International Legal Crisis Argument ............................................................................... 27
Table 2-1: Theoretical Expectations.. ................................................................................................. 46
Table 3-1: Investment Treaty Negotiations ....................................................................................... 58
Table 3-2: Theoretical Expectations about the Creation of Investor-State Arbitration .............. 67
Table 3-3: Expropriation Rates over Time ........................................................................................ 69
Table 3-4: Resolutions and International Legal Crisis over Time .................................................. 75
Table 3-5: Draft Conventions Proposed by the Investment TAN ................................................ 84
Table 3-6: Content of Hard BITs ........................................................................................................ 92
Table 3-7: The Identity of Innovators ................................................................................................ 99
Figure 4-1: Crisis Predictions about Innovators ................................................................................ 113
Table 4-1: Sectoral Distributions of Expropriations (1960-1992) .................................................. 114
Figure 4-2: Legal Crisis, Specific Predictions ..................................................................................... 116
Table 4-2: Comparison of Means for Adoption of Hard BIT ........................................................ 117
Figure 4-3: Scatter Plot of State Susceptibility ................................................................................... 118
Table 4-3 Summary Statistics ............................................................................................................... 124
Table 4-4: Probit Results for Decision to Sign a Hard BIT (1968-1980) ...................................... 132
Table 4-5: Two-Stage Probit Model with Sample Selection (1968-1980) ...................................... 138
Figure 4-4: Tipping Point, All BITs, Elkins et al Dataset ................................................................ 144
Figure 4-5: Tipping Point, hard BITs, Yackee’s dataset ................................................................... 144
Table 4-6: Tipping Point Across Datasets ......................................................................................... 145
Table 4-7: Comparison of Means over Time ..................................................................................... 147
Table 4-8: Two-Stage Probit Model with Sample Selection (1968-1989) ...................................... 150
Table 4-9: Two-Stage Probit Model with Sample Selection (1968-1992) ...................................... 151
Table 5-1: Treaty Negotiations ............................................................................................................ 166
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Table 5-2: Theoretical Expectations about the Creation of Criminal Courts ............................... 175
Table 5-3: Interwar Group’s Proposed Conventions (1920s) ......................................................... 186
Table 5-4: Crimes included in the Draft Code of Offences (1950) ................................................ 192
Table 5-5: Sources Influencing the Draft Code of Offenses .......................................................... 195
Table 5-6: Innovators ............................................................................................................................ 209

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Acknowledgements
I have written this dissertation with the guidance and support of so many. I am indebted to
my dissertation committee at Columbia University: Jack Snyder, Tonya Putnam and Nisha Fazal.
Jack pushed me towards thinking about bigger puzzles and broader themes, and in his typically
understated way offered short, thoughtful advice, always proposing a more interesting framing. Jack
somehow found a way to be available on short notice, was always quick to read my material, provide
helpful insight--and his occasional deadpan remarks still make me smile. Tonya tended to be three
months ahead of me in identifying core problems with my dissertation, and was always patient and
ready to help me work through them once I had caught on. Her extensive questions and comments
challenged me to think carefully about the limits of my claims, be more precise in my arguments,
and vastly improved this dissertation. Nisha read my materials carefully, offering detailed, thoughtful
comments at every stage in this process, not only identifying problems, but helpfully suggesting
concrete solutions. She encouraged me to present my work before I felt it was ready and sent me the
occasional “checking in” email inquiry, which meant a huge amount to me. I am grateful to all three
of them for understanding when I needed to put the dissertation on the back burner, and for always
being ready to read when I picked it up again. I am also indebted to Lori Damrosch, who offered
guidance at important crossroads in my research. Both Lori and Anthea Roberts posed thoughtful
questions and supportive comments at my defense, for which I am very grateful.
At Columbia, I was also fortunate to be part of the ISERP interdisciplinary Mellons Fellow
Program which provided me with funding and institutional support. I thank especially Bill
McAllister, whose enthusiasm and kindness always made the basement brighter. Beyond Columbia,
I thank Jason Yackee for generously sharing his BITs data and Alice Henriques for helping me with
the statistics.
My peers in the political science department were both supportive colleagues and wonderful
friends. They provided thoughtful advice, inspiration, and encouragement. I am grateful to, Brooke
Greene, Dafna Hochman Rand, Allan Roth, Ivan Savic, Radha Webley, Alex Weiseger, Matthew
Winters, and Boliang Zhu, and especially to Adriana Lins de Albuquerque and Reyko Huang. I am
particularly indebted to Tabinda Khan for her friendship, wisdom and support. I am also grateful to
Nur Laiq for her words of encouragement, Paul Cornelius for our late night coffees, and to Neeraja
Poddar for her friendship, advice and generosity with her dal.
Although not involved in this project, my friends and colleagues at Duke Law School have
been a crucial source of support and encouragement. I am grateful to both Dean Levi and Curtis
Bradley for their support during my time at Duke, and particularly for their generosity in extending
my visit, and to Curt, for his always helpful comments on my work. I am also grateful to Laurence
Helfer and Guy Charles for being wonderful mentors. They have been exceedingly generous with
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their time and advice and have offered me both detailed and big-picture comments that have greatly
improved my work. Their unwavering support has helped increase my confidence. I am also
indebted to Rachel Brewster and Maggie Lemos. They have offered invaluable feedback on my
work, provided insightful guidance about the job market, and have been absurdly available,
thoughtful, and funny. They have made concrete the type of academic and mentor I hope to be. For
their thoughtful comments on my work, encouragement as I navigate the job market, and their
friendship, I am so indebted also to Joseph Blocher, Marin Levy, Destiny Peery, and Dana Remus.
Bizzie Pinsky, Sarah Russell, Emily Sapienza, Valerie Schneider and Dorothy Stam have been
my compass, so that I can never feel truly lost. I am thankful for their being understanding when I
have been so tied up in my own work, and for their love and support. Bhaven Sampat helped me get
through my hardest moments in this process. I am grateful to him for his help with and wise advice
on my dissertation (even if I didn’t always listen), for his confidence in me, for getting me out of the
Columbia bubble, for reminding me what matters, and for making me laugh like no one else.
My deepest gratitude is to my family. Juliana and Anika have been pure joy, and Heath has
consistently rooted for me. I could not have made it through this process without the fierce support
and love of my sister, Tai. Within and beyond the dissertation process, she has been by my side
unfailingly – cheering me on, talking me through, and listening. I am more thankful to her than I am
able to convey. Finally, at every stage of the dissertation, my parents have been my most committed
mentors, my biggest fans and my role models. In her work on prisons, my mom has carved her own
path in integrating research, teaching and political activism as so few scholars do, and that one day I
hope to, in my own way, replicate. My dad’s unbounded curiosity, his genuine intellectual open
mindedness, and his ridiculous amount of knowledge have inspired me. But most of all it is his
unwavering clarity about the importance of following your own questions, writing only what you
believe, and being happy with kicking the ball forward an inch at a time that I will take with me to
the next stage. More than anyone, he has discussed the ideas in this dissertation with me, read draft
after draft, cheered me on when I was full of doubt, and believed in me. To both of my parents, for
all your love and all your support, in and beyond the dissertation –words truly fail me. Thank you
for everything.
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