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Has investor protection been rendered obsolete by the Argentine crisis?

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  • Mortimore, Michael
  • Stanley, Leonardo

Abstract

Unlike the train of events in previous crises, when the negotiations between the parties -creditors and debtors, investors and host countries- were played out within some kind of institutional framework, the crisis of 2001 portrayed Argentina as a country abandoned to its fate, not just once, but twice. But although investors had initially been able to alter the rules in their favour to secure better protection and enhanced legal certainty, ultimately they came out of the situation worse off. The Argentine experience suggests that, as the influence of the international financial institutions declines, asymmetric solutions cannot last and, at the end of the day, democratic governments will put their electorate before their investors. But is the Argentine case an exception to the rule or does it reflect a more general weakening of foreign investment protection?

Suggested Citation

  • Mortimore, Michael & Stanley, Leonardo, 2006. "Has investor protection been rendered obsolete by the Argentine crisis?," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
  • Handle: RePEc:ecr:col070:11146
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    File URL: http://repositorio.cepal.org/handle/11362/11146
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    References listed on IDEAS

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    1. Eichengreen, Barry, 1988. "Resolving Debt Crises: An Historical Perspective," CEPR Discussion Papers 239, C.E.P.R. Discussion Papers.
    2. Machinea, José Luis, 2002. "La crisis de la deuda, el financiamiento internacional y la participación del sector privado," Financiamiento para el Desarrollo 5097, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    3. Stanley, Leonardo, 2004. "Acuerdos bilaterales de inversión y demandas ante tribunales internacionales: la experiencia argentina reciente," Desarrollo Productivo 4550, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    4. Mortimore, Michael, 1989. "The conduct of Latin America's creditor banks," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    5. Jennifer Tobin & Susan Rose-Ackerman, 2003. "Foreign Direct Investment and the Business Environment in Developing Countries: the Impact of Bilateral Investment Treaties," William Davidson Institute Working Papers Series 587, William Davidson Institute at the University of Michigan.
    6. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-491, June.
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    Cited by:

    1. Baer, W & Margot, D & Montes-Rojas, G., 2010. "Argentina's default and the lack of dire consequences," Working Papers 10/09, Department of Economics, City University London.
    2. repec:cty:dpaper:1478 is not listed on IDEAS
    3. repec:cty:dpaper:10.1590/s1413-80502011000100007 is not listed on IDEAS

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