Washington CORE recently sat down with Andrew Lugg, Assistant Professor of Political Science at the University of Nevada, Las Vegas, to discuss his research on the evolving challenges facing the Investor-State Dispute Settlement (ISDS) mechanism, which is used globally by international investors to file grievances against host governments over treatment or laws perceived to be unfair. A specialist in international political economy and global governance, Lugg shared his candid insights into why ISDS has become one of the most politically polarizing elements of modern trade and investment agreements.

Lugg noted that the criticism of ISDS spans the political spectrum in countries like the U.S., with concerns ranging from infringement on national sovereignty to the high cost of settlements favoring multinational corporate investors over developing country governments. He also emphasized there is not sufficient data to determine whether the availability of the ISDS mechanism actually helps to maintain and boost foreign direct investment.

Lugg also explored alternative mechanisms such as ombudsman offices and mediation, which offer less adversarial paths to settling investor disputes. Lugg’s research aims to provide a clearer understanding of when and why disputes escalate to ISDS proceedings in the first place.

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