In 2010, more than 70 academics issued a public declaration stating that ‘[i]nvestment treaty arbitration as currently constituted is not a fair, independent, and balanced method for the resolution of investment disputes and therefore should not be relied on for this purpose’ and that ‘[t]here is a strong moral as well as policy case for governments to withdraw from investment treaties and to oppose investor-state arbitration’. More than a decade has passed since this declaration. While it is true that investment treaty arbitration is still alive, it is also true that the latter (arguably) seems to still be under challenge. On this assumption, and against the backdrop of the alleged and controversial investment arbitration ‘crisis’, this research addresses what appears to be a ‘noisy’ gap in the legal and economic debate: does the lack of diversity and legitimacy make the ISDS an inefficient system? To provide a ‘new’ perspective and, at the same time, support the importance of more judicious use of the economic approach in international law, this research aims to fill this gap by analysing the relationship between ‘lack of legitimacy’ and ‘lack of diversity’ in terms of economic costs. It will be illustrated why and under which conditions addressing the lack of diversity in ISDS entails an improvement in the legitimacy of the system and, consequently, whether and under which conditions the above findings lead to increased efficiency in ISDS. To this end, a notion of sustainable diversity will be proposed. The claim is that geographical-, gender- and/or arbitrators-based definitions of diversity should be replaced by a definition of diversity that takes into account the beliefs of ISDS constituencies.