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?
Multiple plausible folk theories are at play in UNCITRAL Working Group III. Some, like those above, are core justifications for investor–state dispute settlement, while others are newer and emerging within reform debates. We will discuss a variety of these plausible folk theories in this blog series as the reform process unfolds so that readers can see how certain rhetorical claims are made, narrative battles are fought, and evidence is or is not used. The example that we feature this time is a claim about the impact of investment treaties and structural reform on investment flows.
By Anthea Roberts and Taylor St John
