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Foreign direct investment (FDI) gained renewed vigor during the 1990s. The treatment of FDI was also significantly modified, especially from an institutional perspective. The generalization of bilateral investment treaties (BITs) provided foreign investors with a series of rights and guarantees and an investor-state dispute settlement mechanism based on international arbitration. The International Center for the Settlement of Investment Disputes (ICSID), part of the World Bank, is the principal forum for such actions. The implicit assumption was that this new institutional framework would result in greater FDI inflows without any additional costs. Argentina attempted to attract more FDI in this manner as well as by way of new economic policy initiatives. The Menem government signed over 50 BITs, which brought the international arbitration mechanism into play, and opened up the economy, privatized a host of state …