The EU on the Investment Path-Quo Vadis Europe?

With the 2009 Treaty of Lisbon, Foreign Direct Investment (FDI) was inserted into the framework of the existing Common Commercial Policy (CCP) as Article 207 of the Treaty on the Functioning of the European Union (TFEU). Article 207(1) TFEU provides: 1. The common commercial policy shall be based on uniform principles, particularly with regard to changes in tariff rates, the conclusion of tariff and trade agreements relating to trade in goods and services, and the commercial aspects of intellectual property, foreign direct investment, the achievement of uniformity in measures of liberalisation, export policy and measures to protect trade such as those to be taken in the event of dumping or subsidies. The common commercial policy shall be conducted in the context of the principles and objectives of the Union\u27s external action. To many (member states) this new competence came as a surprise since it was not substantially debated during the Lisbon Treaty negotiations but seems to have entered the final text in a rather unnoticed fashion. Immediately after the entry-into-force of the Lisbon Treaty the debate focused on the scope of the new investment power and in particular on the limitation to FDI and its implications for the practice of EU treaty-making, whether the “new” EU investment power was limited to questions of market access or extended to the so-called post-investment phase as well, and whether future EU investment treaties would contain investor-State dispute settlement provisions. Meanwhile the EU Commission has strongly asserted its FDI powers under Article 207(1) TFEU and plans to conclude treaties that cover the entire range of issues currently addressed in EU Member State BITs. Also the initial reluctance towards investor-State dispute settlement seems to have given way to a more positive attitude in this regard. In July 2010, the Commission issued some preliminary thoughts in a Communication which were taken up by the Council’s Conclusions of October 2010 and the Parliament’s Resolution of April 2011. While the Union is expected to issue more detailed documents by the end of 2012, this paper will discuss the potential shape of future EU investment treaties as far it can be discerned already. It will also address the underlying power struggle between the member states and the Union regarding the control over investment policy. At the same time, calls by various stakeholders for often conflicting goals, such as more protection against the “regulatory chill” of investment protection, more efficient tools to implement investor obligations and more effective enforcement of investment awards, will be addressed. From 2004 to 2006 he was Dean for International Relations of the Law School of the University of Vienna. He deals with Holocaust related property claims, as president of an UNCITRAL investment arbitration tribunal and as arbitrator and expert in other investment cases

The EU on the Investment Path-Quo Vadis Europe?

With the 2009 Treaty of Lisbon, Foreign Direct Investment (FDI) was inserted into the framework of the existing Common Commercial Policy (CCP) as Article 207 of the Treaty on the Functioning of the European Union (TFEU). Article 207(1) TFEU provides: 1. The common commercial policy shall be based on uniform principles, particularly with regard to changes in tariff rates, the conclusion of tariff and trade agreements relating to trade in goods and services, and the commercial aspects of intellectual property, foreign direct investment, the achievement of uniformity in measures of liberalisation, export policy and measures to protect trade such as those to be taken in the event of dumping or subsidies. The common commercial policy shall be conducted in the context of the principles and objectives of the Union\u27s external action. To many (member states) this new competence came as a surprise since it was not substantially debated during the Lisbon Treaty negotiations but seems to have entered the final text in a rather unnoticed fashion. Immediately after the entry-into-force of the Lisbon Treaty the debate focused on the scope of the new investment power and in particular on the limitation to FDI and its implications for the practice of EU treaty-making, whether the “new” EU investment power was limited to questions of market access or extended to the so-called post-investment phase as well, and whether future EU investment treaties would contain investor-State dispute settlement provisions. Meanwhile the EU Commission has strongly asserted its FDI powers under Article 207(1) TFEU and plans to conclude treaties that cover the entire range of issues currently addressed in EU Member State BITs. Also the initial reluctance towards investor-State dispute settlement seems to have given way to a more positive attitude in this regard. In July 2010, the Commission issued some preliminary thoughts in a Communication which were taken up by the Council’s Conclusions of October 2010 and the Parliament’s Resolution of April 2011. While the Union is expected to issue more detailed documents by the end of 2012, this paper will discuss the potential shape of future EU investment treaties as far it can be discerned already. It will also address the underlying power struggle between the member states and the Union regarding the control over investment policy. At the same time, calls by various stakeholders for often conflicting goals, such as more protection against the “regulatory chill” of investment protection, more efficient tools to implement investor obligations and more effective enforcement of investment awards, will be addressed. From 2004 to 2006 he was Dean for International Relations of the Law School of the University of Vienna. He deals with Holocaust related property claims, as president of an UNCITRAL investment arbitration tribunal and as arbitrator and expert in other investment cases

Fiscal Centralization, Limited Government, and Public Revenues in Europe, 1650-1913

Old Regime polities typically suffered from fiscal fragmentation and absolutist rule. By the start of World War I, however, many such countries had centralized institutions and limited government. This article uses a new panel data set to perform a statistical analysis of political regimes and public revenues in Europe from 1650 to 1913. Panel regressions indicate that centralized and limited regimes were associated with significantly higher revenues than fragmented and absolutist ones. Structural break tests also suggest close relationships between major turning points in revenue series and political transformations

Warfare, Fiscal Capacity, and Performance

We exploit differences in casualties sustained in pre-modern wars to estimate the impact of fiscal capacity on economic performance. In the past, states fought different amounts of external conflicts, of various lengths and magnitudes. To raise the revenues to wage wars, states made fiscal innovations, which persisted and helped to shape current fiscal institutions. Economic historians claim that greater fiscal capacity was the key long-run institutional change brought about by historical conflicts. Using casualties sustained in pre-modern wars to instrument for current fiscal institutions, we estimate substantial impacts of fiscal capacity on GDP per worker. The results are robust to a broad range of specifications, controls, and sub-samples

Political Regimes and Sovereign Credit Risk in Europe, 1750-1913

This article uses a new panel data set to perform a statistical analysis of political regimes and sovereign credit risk in Europe from 1750 to 1913. Old Regime polities typically suffered from fiscal fragmentation and absolutist rule. By the start of World War I, however, many such countries had centralized institutions and limited government. Panel regressions indicate that centralized and?or limited regimes were associated with significant improvements in credit risk relative to fragmented and absolutist ones. Structural break tests also reveal close relationships between major turning points in yield series and political transformations

Different paths to the modern state in Europe: the interaction between domestic political economy and interstate competition

Theoretical work on state formation and capacity has focused mostly on early modern Europe and on the experience of western European states during this period. While a number of European states monopolized domestic tax collection and achieved gains in state capacity during the early modern era, for others revenues stagnated or even declined, and these variations motivated alternative hypotheses for determinants of fiscal and state capacity. In this study we test the basic hypotheses in the existing literature making use of the large date set we have compiled for all of the leading states across the continent. We find strong empirical support for two prevailing threads in the literature, arguing respectively that interstate wars and changes in economic structure towards an urbanized economy had positive fiscal impact. Regarding the main point of contention in the theoretical literature, whether it was representative or authoritarian political regimes that facilitated the gains in fiscal capacity, we do not find conclusive evidence that one performed better than the other. Instead, the empirical evidence we have gathered lends supports to the hypothesis that when under pressure of war, the fiscal performance of representative regimes was better in the more urbanized-commercial economies and the fiscal performance of authoritarian regimes was better in rural-agrarian economie

Beneficial Bombing

The Progressive Era, marked by a desire for economic, political, and social reform, ended for most Americans with the ugly reality and devastation of World War I. Yet for Army Air Service officers, the carnage and waste witnessed on the western front only served to spark a new progressive movement—to reform war by relying on destructive technology as the instrument of change. In Beneficial Bombing Mark Clodfelter describes how American airmen, horrified by World War I’s trench warfare, turned to the progressive ideas of efficiency and economy in an effort to reform war itself, with the heavy bomber as their solution to limiting the bloodshed. They were convinced that the airplane, used as a bombing platform, offered the means to make wars less lethal than conflicts waged by armies or navies. Clodfelter examines the progressive idealism that led to the creation of the U.S. Air Force and its doctrine that the finite destruction of precision bombing would end wars more quickly and with less suffering for each belligerent. What is more, his work shows how these progressive ideas emerged intact after World War II to become the foundation of modern U.S. Air Force doctrine. Drawing on a wealth of archival material, including critical documents unavailable to previous researchers, Clodfelter presents the most complete analysis ever of the doctrinal development underpinning current U.S. Air Force notions about strategic bombing