This dissertation examines the causes and consequences of the global privatization of commercial dispute resolution. Specifically, I investigate the origins of the movement behind the construction of international commercial arbitration (ICA) and how this regime interacts with domestic legal institutions today. ICA is a private system of binding dispute resolution in which parties have near complete freedom to design the process to fit their needs with minimal judicial oversight. To account for the rapid growth of ICA, I present a novel theory of institutional construction and change that accounts for the out-sized role of non-state, professional groups in the construction of transnational legal regimes such as ICA. Beyond providing know-how and expertise, expert and professional groups seek to enhance their professional prestige and workload by shaping institutions in order to cement their own authority over the institution's mandate. I test this theory in two ways. First, I use extensive archival material to trace the origins of the commercial arbitration movement in the United States and its expansion abroad. Second, I use data on local commercial arbitration laws as well as case, roster and professional membership data from leading international arbitration centers and professional groups to examine the effect of ICA on the authority of domestic courts. I show the ICA serves as a systemic substitute for local courts with respect to foreign direct investment, negating the well-known sensitivity of foreign direct investors to the quality of local legal institutions. This has the indirect effect of eroding the quality of local legal institutions, particularly in countries in which extant legal infrastructure is already unstable.