Interaction of Tax incentives and Performance Requirements in Bilateral Investment Treaties: Its Role in Implementing Right Institutions in Developing Countries

摘要

After a failure of the Washington Consensus, many recommend that developing countries implement right institutions (i.e. institutions that are tailored to local environments and socio and political cultures) for further development. Bilateral Investment Treaties (hereinafter ud“BITs”) could be a good alternative instrument to establish the right institutions since the treaties significantly impact the institutions of one’s nation. The essay introduces ways to carve out a lawful combination of tax incentives and performance requirements in BITs, udwhich could may foster right institutions in developing countries. This essay contributes to the literature by 1) reconciling the concept of right institutions in law and development with the BIT literature and 2) examining the methods to identify certain types of tax incentives and performance requirements lawfully and their implications on right institutions in developing and emerging nations.