This paper reviews the significant changes in national and international policies on foreign direct investment (FDI) over the past decades. These changes have been both cause and effect in the ongoing integration of the world economy and the changing role of FDI in it. They have found expression in national laws and practices and in a variety of international instruments, bilateral, regional and multilateral. In particular in the 1980s, a series of national and international developments radically reversed the policy trends prevailing until then, with an immediate impact both on national policies regarding inward FDI and on regional and worldwide efforts at establishing international rules on the subject. Now at the end of the 1990s, host countries are seeking to attract FDI, by dismantling restrictions on its entry and operations and by offering strict guarantees, both national and international, against measures seriously damaging the investors’ interests. The tone and direction of international legal discourse has significantly changed. Debate among policy makers is now centred on the most efficient way of attracting FDI and deriving benefits from it rather than on questions of jurisdiction. This is also reflected in the emerging international legal framework for FDI that consists of many kinds of national and international rules and principles, of diverse form and origin, differing in strength and degree of specificity.