The Subsidiarity Principle and Foreign Investors’ Participation in Treaty Negotiations as a Mechanism for Reinforcing the Rule of Law

Abstract

In recent debates, the narrative has been to secure and promote the rule of law at both domestic and international levels. As such, the international investment legal system may be advanced to justify and legitimise the existence and operation of the rule of law. The subsidiarity principle asserts that matters should be handled by the smallest, least centralised competent authority. In this article, I address the research question: How can the subsidiarity principle and foreign investor participation be strategically integrated into treaty negotiations to strengthen the rule of law within the international investment framework? I use a doctrinal research methodology to explore the interplay between the subsidiarity principle and foreign investor involvement as complementary mechanisms for reinforcing the rule of law in international investment negotiations. The subsidiarity principle, traditionally rooted in constitutional and administrative law, is examined in the context of global investment governance to assess its potential in empowering domestic legal institutions while maintaining coherence with international legal standards. Using the doctrinal and normative research methodology, I investigate how foreign investors can act as catalysts for legal reform and institutional strengthening in host states through treaties and corporate responsibility initiatives. I demonstrate that when the subsidiarity principle is operationalised alongside meaningful investor engagement, it can balance the negotiation power, enhance transparency, and promote legal predictability. The findings suggest normative mechanisms of participation where subsidiarity and investor participation are not merely procedural tools but strategic levers for embedding the rule of law in investment practices.