Cross-border investment has been a major feature of economic development and globalisation for some decades. Underpinning this phenomenon is a myriad of bilateral and multilateral international investment agreements (“IIAs”) whose stated purpose is the promotion and protection of such investments. From an economist’s perspective these are instruments whose effect is to strengthen certain property rights. An extensive academic literature stresses the role that secure property rights have played and continue to play in promoting economic development.
Readers will be well aware in that context that the ICSID Convention does not define the notion of “investment,” and that consequently “the concept of what does – or rather what does not – constitute an ‘investment’ for the purposes of Article 25 of the ICSID Convention has turned out to be one of the most highly contested issues in the development of practice under the Convention.” The scope of this article is to discuss from an economic rather than a legal standpoint the meaning of “investment.”