CH. 7 Investment Flashcards
Bolded words from chapter 7 of Johns' Politics and International Law.
investment of capital from a firm in one state into business activities that take place in another state
foreign direct investment (FDI)
assets that can’t easily be moved or redeployed for other activities
immobile assets
situation in which sequential decision-making ensures that plan of action that is initially optimal become suboptimal as time passes
commitment problem
situation in which states jointly benefit from choosing the same action, but each state is tempted to unilaterally deviate to a different action
collaboration problem
assets that can be easily moved or redeployed for other activities
mobile assets
doctrine that states have the right to protect their nationals at international level
right to diplomatic protection
claim that states must provide prompt, adequate, and effective compensation if they expropriate property from foreign firms
Hull Doctrine
asserts that principle of sovereign equality allows all states to set their own economic policies without interference by other states
Calvo Doctrine
policies implemented by gov’ts actively managing their domestic economies and engaging directly in business activities by creating and financing state-owned entities
import substitution industrialization (ISI)
political coalition formed within UN by developing states trying to promote their common interests
Group of 77
created by Group of 77 and articulated in the Charter of Economic Rights and Duties of States; a set of trade, investment, development, and assistance policies to promote interests of developing states
New International Economic Order
conditions/policies intended to prevent future economic crises; one major policy was to encourage FDI in order to stimulate gov’t growth, other policies included lowering trade barriers and privatizing state-owned enterprises
Washington Consensus
occurs when government’s actions deprive a firm of the full value of its investment
direct expropriation
occurs when government’s acctions violate pre-existing contracts or laws, and substantially reduce value of a foreign firm’s property, often via taxation or regulation
indirect expropriation
a relative standard; requires a foreign investor receive treatment that is at least as favorable as the treatment received by a similar domestic investor (investor in “like circumstances”)
national treatment
