My dissertation focuses on studying the ways in which cooperation can erode sovereignty. I use network and textual analytic approaches to study the proliferation of international investment agreements (IIAs), particularly, bilateral investment treaties (BITs); the impact that participation in these agreements has had on states; and how they are evolving as states realize their implications for sovereignty. A key assumption in much of the literature is that countries sought to make credible commitments when signing these agreements. But these agreements have had unintended consequences. These treaties were poorly understood initially, not only by participating countries, but also by the lawyers negotiating them and the multinational corporations who stood to benefit from them. This collective ignorance about the long-term implications of these agreements is at the core of why these agreements proliferated and how they are currently evolving. In short, the importance of studying these agreements rests on the fact that they provide the legal edifice for a system of international investment dispute settlement (ISDS) that is increasingly being perceived, by even developed countries, as a potential risk to state sovereignty.
- Searching for Costless Commitments: Network Dynamics and BITs
Developing countries seemingly rushed to participate in bilateral investment treaties (BITs) in the 1990s. Since then these agreements have formed the edifice for a "common lexicon of investment treaty law" (McLachlan et al. 2007), which has shown itself to be uniquely adept at empowering transnational actors, such as MNCs, to extract compensation from states and even threaten domestic policy objectives. The significant costs faced by states poses an obvious question of the BIT regime, namely, what are the dynamics under which these agreements proliferated in the international system from 385 in 1989 to almost 3,000 by 2015? I argue that to understand the haphazard way in which these agreements proliferated across the international system we have to take into account political rather than economic dimensions, namely, that these agreements were seen by some countries as a costless tool through which to enhance or underscore existing interstate political relationships. Further in answering this question, much of the extant literature has utilized directed-dyadic duration models. Yet, these models cannot account for the effect of network pressures in the international system. By disregarding these network attributes, researchers miss a wealth of structural information. Using a longitudinal network based approach, I make three contributions to the existing literature: first, I highlight the importance of studying these types of agreements in a network context, second, I show that there is little support for the extant explanations in the literature, and third, I highlight the importance of interstate political relations in explaining the proliferation of BITs.
- Puzzling Commitments: Time-Inconsistency Problems & BITs
Recent literature on foreign direct investment (FDI) has focused on the role of international investment agreements, specifically bilateral investment treaties (BITs), in explaining inflows into developing countries. The theory posits that these agreements can be used by developing countries with weak domestic property rights as a commitment device to overcome time inconsistency problems. I employ a simulation-based approach to gauge the substantive effects of these agreements on FDI inflows, and find that the effects are minor and uncertain. Next, I take a step back and explore the link through which BITs are meant to increase FDI inflows, namely perceived changes in the investment climate in the host country as a result of ratifying BITs. Using data from the the International Country Risk Guide (ICRG), I find that the causal mechanism linkings BITs to increased FDI does not hold. Both of these findings cast serious doubt on major hypotheses in the literature about the effects of BITs on FDI flows to developing countries.