On the basis of the latter criticism, this analysis begins with the assumption that investment conflicts are not analogous to expropriations. First, unlike expropriations, disputes cannot be equated with violations of international law and are therefore not useful indicators of political risks. Significant legal ambiguities characterize arbitration actions, mainly directed against indirect and non-direct expropriations and aimed at democracies rather than rent-seeking autocracies. Second, investment disputes can give rise to considerable claims for financial damages from investors, but states are not normally able to make comparable profits. Even if they win, states only reduce their potential material and reputational losses, with no advantage over the status quo ante. Cases of complete expropriation are a partial exception, but they account for only 16 percent of cases filed over the past three decades (Pelc 2017, 562). Under the current legal framework, the cost of expropriating foreign investment is also high. Even Latin American countries, which have vigorously questioned the legitimacy of the international investment regime, have been forced to decide on expropriation bonuses, often by transferring funds to third-party companies specializing in the purchase of rights to receive unpaid rewards. The expected benefits of participation in litigation for States are therefore markedly limited, as is the availability of third-party funds, which have become a well-established feature of international arbitration (Cremades 2011). Vis-Dunbar, Damon and Henrique Suzy Nikiema. 2009. “Do bilateral investment agreements lead to more foreign investment?” Investment Treaty news, 30 April. www.iisd.org/itn/2009/04/30/do-bilateral-investment-treaties-lead-to-more-foreign-investment/.
Presidential elections in Brazil, Mexico and Colombia could influence the political landscape of the region. Candidates who would not have succeeded in the previous elections or who would have been sacked quickly are leading the polls. Many of these toplists have nationalist, populist and protectionist attitudes. As other countries have seen, LatAm voters seem to have grown tired of the deep-seated political decisions and corruption scandals that have tormented their governments. . . .