Lauge N. Skovgaard Poulsen, publishing with Cambridge University Press, investigates how developing states historically negotiated investment treaties based on flawed or incomplete economic assumptions. He utilizes behavioral economics to argue that many governments signed binding pre-commitments without actually understanding the severe legal risks they adopted. The behavioral approach fundamentally shatters the myth of perfectly rational state consent, though it risks infantalizing the sophisticated legal teams that many developing states employ today. This empirical study forces readers weighing the validity of sovereignty erosion to question whether the initial consent to these mechanisms was ever truly informed. The behavioral critique directly attacks the premise of the thesis, suggesting that the explicit consent driving the erosion of sovereignty was largely illusory.
Lauge N. Skovgaard Poulsen, Bounded Rationality and Economic Diplomacy (Web Page)
