As observers of the UNCITRAL process, we watch the debates with great interest, writing about the emergence of different camps, giving perspectives on how the process fits within broader geopolitical developments, and offering potential models for moving forward. One thing that we are often struck by is how some of the field’s underlying narratives are being contested and reframed. In any reform process, some scripts about the old system are kept and others are discarded or rewritten. What does that process look like? At UNCITRAL in late January, we were able to watch it occur with respect to one long-held narrative: that investment treaties with investor–state arbitration are important for attracting and retaining foreign investment.
Plausible Folk Theories
Terence Halliday, a professor of the sociology of global governance and a long-time observer of UNCITRAL, coined the term ‘plausible folk theories’ to refer to the way in which ‘vast enterprises of global regulation and lawmaking [often] proceed on weakly founded justificatory rhetorics’. What he means by this is that many rules and regulations are passed at the global level based on assertions that are not subject to empirical testing. Instead, negotiators and policy makers frequently rely on assertions that sound reasonable but remain unverified.
A plausible folk theory isn’t necessarily wrong about the facts, it just isn’t verified. It may be contrary to empirical evidence, it may not. In the absence of factual support, what makes a folk theory plausible? Parsimony (it is simple), face validity (it sounds right), rhetorical compactness (it can be easily expressed), ambiguity (it papers over divisions), affinity with extant beliefs (it accords with prior assumptions), and unexamined premises and logics (it relies on assumptions and isn’t designed to withstand rigorous testing). Of all of these, the first two are probably the most important: does it have the simple sound of truth?
Arguably, the investment treaty system has long been built on plausible folk theories. If asked why states sign investment treaties, most people in the field historically would have answered ‘because it depoliticizes investment disputes’ or ‘because it increases foreign investment’ or ‘because it contributes to the rule of law’. These arguments sound right. They are plausible. They have the sound of truth to them. Yet, as the field has evolved, these claims have come under scrutiny in the academic literature and some have not stood up well. But is this evidence used in global governance debates? If not, why? Read the rest of this entry…