Competing for Capital: The Diffusion of Bilateral Investment Treaties, 1959-2000


Competing for Capital: The Diffusion of Bilateral Investment Treaties, 1959-2000

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dc.creator Elkins, Zachary
dc.creator Guzman, Andrew
dc.creator Simmons, Beth A. 2012-05-18T18:49:25Z 2012-05-18T18:49:25Z 2006-10 2012-05-18
dc.identifier.citation Elkins, Zachary, Andrew Guzman, and Beth A. Simmons. "Competing for Capital: The Diffusion of Bilateral Investment Treaties, 1959-2000" International Organization, Volume 60, Number 4, Fall (October 2006), pp. 811-846
dc.description.abstract Over the past forty-five years, bilateral investment treaties (BITs) have become the most important international legal mechanism for the encouragement and governance of foreign direct investment. The proliferation of BITs during the past two decades in particular has been phenomenal. These intergovernmental treaties typically grant extensive rights to foreign investors, including protection of contractual rights and the right to international arbitration in the event of an investment dispute. How can we explain the widespread adoption of BITs? We argue that the spread of BITs is driven by international competition among potential host countries—typically developing countries—for foreign direct investment. We propose a set of hypotheses that derive from such an explanation and develop a set of empirical tests that rely on network measures of economic competition as well as more indirect evidence of competitive pressures on the host to sign BITs. The evidence suggests that potential hosts are more likely to sign BITs when their competitors have done so. We find some evidence that coercion and learning play a role, but less support for cultural explanations based on emulation. Our main finding is that the diffusion of BITs is associated with competitive economic pressures among developing countries to capture a share of foreign investment. We are agnostic at this point about the benefits of this competition for development.
dc.language.iso eng
dc.publisher International Organization
dc.publisher International Organization Foundation
dc.subject bilateral investment treaties
dc.subject political economy
dc.subject international political economy
dc.subject foreign direct investment
dc.subject FDI
dc.subject BIT
dc.subject economic development
dc.title Competing for Capital: The Diffusion of Bilateral Investment Treaties, 1959-2000
dc.type Article
dc.description.department Government
dc.identifier.doi 10.10170S0020818306060279

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