Outside of securities and (to some extent) labor arbitration, the arbitrators in the sample routinely wrote lengthy awards that were substantially devoted to legal analysis and that made extensive use of precedent. The vast majority of cited precedent, moreover, came from published judicial opinions. Arbitrators did cite to past arbitration awards, but primarily to fill gaps in the law created by government actors. On the whole, the evidence provides little support for the view that arbitrators and judges engage in qualitatively different kinds of decision-making or opinion-writing.

In this article, I describe how this standard account cannot explain the origins of arbitration clauses in sovereign bond contracts. Drawing on original archival research and secondary sources, the article traces the routine use of arbitration clauses to U.S. dollar diplomacy in the first decades of the 20th century and shows that these early clauses were not designed to facilitate an arbitration between lender and borrower. Instead, the clauses were designed to justify intervention by capital-exporting states on behalf of disappointed citizen-investors and to convince prospective investors that the prospect of such intervention would deter default. These early arbitration clauses, then, were little more than efforts to signify and project power by capital-exporting states. The article traces the evolution of arbitration clauses over the first half of the century and concludes that lenders often hoped (typically in vain) that these clauses would enable them to harness the enforcement capacity of state actors.

Recognizing the significance of workplace dispute resolution leads to this Article’s broader goal. That goal is to expose, and hopefully bridge, an artificial conceptual divide that separates arbitration research from research into workplace dispute resolution. Many researchers view internal compliance and grievance procedures as a means of harnessing the employer’s own regulatory capacity. This conception drives a research agenda that explores the role of workplace structures in generating private norms and in implementing (or subverting) public norms like anti-discrimination. By contrast, the arbitration outcome research conceives of arbitration narrowly as a court surrogate, one that should ideally yield equivalent outcomes at lower cost. Although legitimate to a degree, this conception artificially separates arbitration from other employer-structured disputing procedures and yields an empirical agenda that leaves fundamental questions unanswered. This Article closes by discussing two of these questions: First, do arbitrators play a meaningful regulatory role, either by shaping other arbitrators’ practices or by shaping the terms of arbitration contracts? Second, under what circumstances do arbitrators effectively generate and enforce norms?

This article explores the phenomenon of standardization in the context of a particular contracting choice: whether to include an arbitration clause in a sovereign bond contract. Most observers take for granted that sovereign bonds adopt boilerplate dispute resolution provisions calling for litigation in foreign courts, typically in New York or in England, even though some parties (by hypothesis) would prefer arbitration. The usual explanation for this discrepancy invokes the inherent “stickiness” of standard terms. This article contests this explanation, demonstrating as an empirical matter that sovereign bond contracts in fact adopt varied dispute resolution terms and arguing that a general preference for litigation, rather than default rule stickiness, best explains the relatively infrequent use of arbitration. In the process, the article raises broader implications for sovereign debt research and for research into contract innovation and change.