The Meaning of 'Investment': ICSID's Travaux and the Domain of International Investment Law

Document Type


Publication Date



This article resolves a long-standing controversy about the definition of “investment” in the core provisions of international investment law's keystone treaty, the ICSID Convention. Commentators and tribunals have often acted as though the Convention, by omitting any specific definition of “investment,” delegated that question to arbitral tribunals for case-by-case lawmaking. This assumption has spun off increasingly complex (and incoherent) doctrinal frameworks for separating valid investments from invalid ones. The enclosed article demonstrates that this effort to impose order from above is completely mistaken.

The historical record shows instead that modern investment law was structured to guarantee that states could extend ICSID protection to any form of economic activity they deemed useful. This was the crucial element of a historic compromise that settled a raging dispute about the very identity of the regime. That compromise has since been forgotten and is recovered for the first time in this article. The resulting test requires near-total deference to state choices about how to define “investment” in contracts, investment laws, and international agreements: if an activity or asset is plausibly economic in nature, it qualifies as an investment that is subject to ICSID's grand bargain.

The article goes on to explain that both the Vienna Convention on the Law of Treaties and customary international law require tribunals to adopt this understanding of the term. Far better than any of the competing definitions of "investment," the actual historical understanding coheres beautifully with the object and purpose of the Convention and aligns with considered state practice on these questions.