The limits of legalization in the international economy: an historical analysis of the regulation of investment flows

Abstract

The present article proposes a historical examination through the tensions that hovered on the international legalization process about investments beyond national borders. To this end, it analyses the estrangements between international actors —states, fundamentally—, on the three dimensions inherent in all phenomena of institutionalization: obligation, precision and delegation. Given that the referred tensions are linked —but never fully— with the political and economic asymmetries between states (exporters / importers of capital or developed / developing economies), the analysis of the legalization in the area of trasnational investments is intertwined with considerations of the "structural conflict" in the international system. The article begins with the premise that the diachronic analysis of the tensions contributes to understand why the regulation of cross-border investments did not reach the institutionalization of a stable and comprehensive international regime, as is reported in other areas of international economics. As regards this anomaly, the article argues that unlike other economic transactions that take place across national borders, investment operations generate long-term consequences and therefore impacts the highest attributes of states: sovereignty and autonomy.