The many faces of sovereignty

Abstract Critiques of international economic law have attacked the tendency of transnational legal processes, including investor-state dispute settlement (ISDS), to undermine states' sovereignty. In response to these criticisms, many states have limited the power of investment tribunals by reasserting their sovereignty. There are reasons, however, to be critical of endorsing sovereignty, particularly in the context of global distributive inequalities. This is because assertions of sovereignty are normatively ambivalent in their effects: they can be used to entrench and naturalize the unequal assets held by each state, rather than to empower states to exercise their right to regulate. These potential tensions can be resolved if sovereignty is understood as a term that is used in many different ways. Critics of ISDS often conflate two distinct meanings of sovereignty: sovereignty understood as the right to be free from external influence, and sovereignty understood as states' right to regulate. Because states are constrained by differences in resources and capacity, withdrawing from ISDS cannot always secure the conditions for effective domestic regulation. Sovereignty understood as the right to be free from interference may even stand in the way of states' ability to regulate, by allowing states to gatekeep resources that were accumulated through historical injustice