Bounded Rationality and Economic Diplomacy

Lauge N. Skovgaard Poulsen is a Lecturer in International Political Economy at University College London.

• Preface: the curious case of Pakistan; 1. Unanticipated consequences; 2. Bounded rationality and the spread of investment treaties; 3. A difficult beginning; 4. Promoting investment treaties; 5. A less then rational competition; 6. Narcissistic learning; 7. Letting down the guard: a case study; 8. Expanding the bounds of rationality in the investment regime.

'Well before the current hype in Europe over investor-state dispute settlement, Poulsen pioneered the view that many countries signed up to investment protection treaties in less than rational ways. This book provides careful, country-specific evidence in support, with eye-opening stories from across the world, ranging from Pakistan and Ghana to the Czech Republic, Costa Rica and South Africa. Countries simply assumed the economic benefits of investment treaties and underestimated the possibility and costs of legal claims. World Bank and UN officials promoted the treaties and so did Western lawyers and advisors. Debunking the rational premise of much of the academic scholarship, this book should be compulsory reading for a new generation of policymakers and scholars alike, if only to avoid the mistakes of the past and find better ways to address today's increasingly complex challenges of economic diplomacy.' Joost Pauwelyn, Graduate Institute, Geneva