A Response to Robert Ahdieh and David Fontana

I appreciate the comments from Professors Fontana and Ahdieh, and don’t have much to quarrel about with them.  They offer useful correctives or supplements to my argument.

On the question of the scope of the argument – that is, the nations where we can expect convergence in constitutional law – my essay notes one important exception, and Professor Fontana raises a question about another.  My essay excepts resource-extracting nations from its scope, largely because such nations do not need to compete with respect to attracting significant numbers of people with high levels of human capital.  Professor Fontana’s question about China raises, I think, similar issues.  It’s not that China is a firmly authoritarian nation, although of course it is, but rather two other things. First, it is simply so large that it might be possible for it to develop the requisite numbers of people with high levels of human capital on its own, without competing for them across borders – and its authoritarian nature might make it possible for it to retain them once trained.  Second, the Chinese market is so large that outsiders might be willing to suppress their preferences for fundamental rights in exchange for the profits to be gained by operating in China (or, alternatively, international businesses could supply people with high levels of human capital for work in China who come from the less rights-concerned tail of the distribution of preferences among such people).

On another question Professor Fontana raises, I would note my view that the expansion of programs of international exchange at the student level has been quite dramatic – not merely the perhaps special case of the Erasmus program within the European Union, but more generally.  The presence of exchange students in classrooms around the world is another of the bottom-up processes that I think likely to affect convergence.

Professor Ahdieh’s discussion of bilateral investment treaties is an extremely important corrective to my argument, and I thank him for it.  Dispute-resolution mechanisms in BITs can indeed substitute for domestic constitutional protection of investment capital.  The question, I think, is how much they can substitute.  There’s a tradeoff between BITs and domestic constitutional law, with respect to the degree of control domestic decision-makers have over implementing institutions.  For domestic constitutional law to “work” in this area, the implementing institutions have to be independent of the nation’s political class – but the political class is not going to want them to be “too” independent.  Yet, outside investors will not be happy with an implementing institution that isn’t independent “enough.”  The converse tradeoff occurs with BITs.  The domestic political class will have to give up something when it agrees to arbitration under a BIT, but it won’t want to give up too much.  I think it’s an important enterprise – and I suspect that someone has already done some work on it – to determine the relative tradeoffs, or, put another way, the rate of substitution between BITs and domestic constitutional law.   Professor Ahdieh’s brief comment raises all these questions, and I would hope to take them into account in any revisit to my essay’s topic.