Abstract The investment treaty regime is currently going through extensive reform. Driven by a raft of investor–state dispute settlement cases, states are asking: How should we draft future investment agreements? This article presents the first empirical analysis of what drives risk in investment agreements. Drawing on states’ own reform narratives, and on unique data on the content of over two thousand investment agreements, I analyze how legalization in investment agreements is associated with the risk of attracting investor–state dispute settlement claims. I find that the only legalization dimension that robustly predicts investor–state dispute settlement claims in investment agreements is substantive obligation, and that this risk is not significantly affected by introducing more flexibility or precision. These findings have important implications for states engaged in reform of their international investment policies. Most prominently, they suggest that states should focus more on what substantive clauses they include in their investment agreements, rather than on how these clauses are written.
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