Corporate Nationality and the Breaking of State Contracts

The interest in global corporations’ activity and behavior is at least in part driven by the perception that these massive firms have become more powerful than states. Indeed, we are often told both in popular accounts and in (some) academic analysis that these firms are able to shape and shift national political economies toward their own needs and interests. However, these broad arguments seldom survive detailed empirical testing, leaving the tendencies in place but often much reducing their strength. In this new book, Rachel Wellhausen looks at the question of the relations between states and firms when contracts between them are broken by states’ governments as a site for testing these sorts of conclusions. Building on a relatively well-developed literature about the observable nationality of corporations, Wellhausen explores states’ governments’ differential treatment of global corporations by virtue of their “nationality,” and the variety of reasons that a government might breach a contract with a corporation. As she sets out, generally governments may withhold payments for internal/domestic political reasons: this can be a response to political resistance to programs of privatization that these non-domestic corporations may have been involved in; this may go as far as an appropriation through (re)nationalization of assets for this or other reasons linked to perceived misconduct of one sort or another; or the breach of contract with a specific nation’s firms may be the continuation of diplomacy by other means. As Wellhausen notes, this tendency toward contract breaching has prompted an upswing of bilateral investment treaties (BITs) but also an expansion of the services of international commercial arbitration, itself of course the subject of considerable analytical attention from Yves Dezalay and Bryant Garth in a series of books published in the past fifteen years, which, perhaps oddly, are not referred to by Wellhausen at all

Appropriation · Corporation · Economics · Law and economics · Market economy · Nationality · Political economy · Political science · Politics · State (computer science · International Arbitration and Investment Law · Law