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During the past few decades governments have signed nearly 2,700 bilateral investment treaties (BITs) with one another in an attempt to attract greater levels of foreign direct investment (FDI). By signing BITs, which contain strong enforcement provisions, investment-seeking governments are thought to more credibly commit to protecting whatever FDI they receive, which in turn should lead to increased confidence among investors and ultimately greater FDI inflows. Our unique argument is that the ability of BITs to increase FDI is contingent on the subsequent good behavior of the governments who sign them. BITs should increase FDI only if governments actually follow through on their BIT commitments; that is, if they comply with the treaties. BITs allow investors to pursue alleged treaty violations through arbitration venues like the International Centre for the Settlement of Investment Disputes (ICSID), a heavily utilized and widely observed arbitral institution that is part of the World Bank. Being taken before ICSID, then, conveys negative information about a host country's behavior to the broader investment community, which could result in a sizeable loss of future FDI into that country. We test these contingent effects of BITs using cross-sectional, time-series analyses on all non-OECD countries during a period spanning 1984–2007. We find that BITs do increase FDI into countries that sign them, but only if those countries are not subsequently challenged before ICSID. On the other hand, governments suffer notable losses of FDI when they are taken before ICSID and suffer even greater losses when they lose an ICSID dispute.
State emergence is an essential dynamic of the international system, yet international relations scholars pay it little attention. Their oversight is all the more unfortunate because international politics ultimately determine which aspiring system members will succeed in becoming new states. Existing models of state emergence rely exclusively on internal or domestic-level explanations. However, the international system is inherently social; therefore any aspiring state's membership also depends on the acceptance of its peers. I present a novel, international-level model of state birth that suggests state leaders should use decisions regarding new members strategically to advance their own interests, not passively abide by domestic factors. I test this argument using a new data set on secessionism and Great Power recognition (1931–2000). I find that external politics have important, underappreciated effects on state emergence. Furthermore, acknowledging the politics of recognition's centrality to state birth alters our understanding of civil conflict dynamics and conflict resolution and suggests important implications for system-wide stability.
States often negotiate with each other over more than one issue at the same time. This article presents a model of multidimensional international crisis bargaining. Unlike unidimensional bargaining, with two issue dimensions states can send costless signals about their resolve that have dramatic effects on other states' beliefs and actions. One reason is that when states claim a willingness to fight over an issue they in fact are not willing to fight over, they may lose the opportunity to get what they really want without conflict. As a result, when there is a chance that adversaries may each be willing to fight over two issues, the states can even sometimes convey with certainty when they will fight for both issues. The model also leads to some surprising comparative statics, for example, decreases in the probability that the target is willing to fight can increase the probability of war.
Fluctuations in the price of oil and the contemporaneous political changes in oil-producing countries have raised an important question about the link between oil rents, political institutions, and civil liberties. This article presents a simple model of the relationship between resource income and political freedom and, using an instrumental variables approach, estimates the causal effect of shocks to oil revenues on levels of democracy. Using a new data set, multiple measures of democracy, and various specifications, I find that the effect of oil price shocks is larger than might be expected and on the order of the effects found from changes in gross domestic product.
For years, the United States has imposed economic sanctions to compel countries to alter their behavior. An important concern is whether government sanctions influence private foreign direct investment (FDI) decisions, the largest source of foreign capital. In the first study to assess empirically the relationship between economic sanctions and FDI, we consider whether U.S. sanctions influence U.S. FDI inflows into targeted countries. Using panel data for 171 countries from 1965 to 2000, we find strong evidence that U.S investors pull out of countries targeted for U.S sanctions prior to their imposition. This disinvestment is not permanent and investment tends to return after the sanctions are imposed. The results provide support for FDI studies that show the effect of risk on investor decision making.
Although scholars have made considerable progress on a number of important research questions by relaxing assumptions commonly used to divide political science into subfields, rigid boundaries remain in some contexts. In this essay, we suggest that the assumption that international politics is characterized by anarchy whereas domestic politics is characterized by hierarchy continues to divide research on the conditions under which governments are constrained by courts, international or domestic. We contend that we will learn more about the process by which courts constrain governments, and do so more quickly, if we relax the assumption and recognize the substantial similarities between domestic and international research on this topic. We review four recent books that highlight contemporary theories of the extent to which domestic and international law binds states, and discuss whether a rigid boundary between international and domestic scholarship can be sustained on either theoretical or empirical grounds.
In an article printed last year in International Organization, Keohane, Macedo, and Moravcsik argued that multilateral organizations (MLO) could actually be good for democracy. We argue that KMM discount the prospect that MLO influence can be detrimental to democracies not because MLOs are “distant, elitist, and technocratic” but precisely because MLOs are highly political. International organizations have much to offer in improving the welfare of citizens and facilitating coordinations among states. They are not likely to improve procedural functions of democracies without a cost that itself is problematic for democracy.
According to our constitutional conception, modern democracy is multidimensional: it incorporates the values of faction control, minority rights protection, and informed deliberation, as well as political accountability. The impact of multilateral organizations (MLOs) on democracy is often not straightforward: it requires careful analysis of how particular MLOs interact with preexisting domestic political institutions within specific issue-areas. Thus we reject the conventional wisdom that MLOs are necessarily democracy-degrading simply because they are not directly participatory. Gartzke and Naoi's critique misstates our views on some fundamental issues. We clarify our analyses of the multidimensional nature of constitutional democracy; the relationship between democracy and multilateralism; the Madisonian distinction between interest groups that support the general interest and those that do not; and our understanding of the current state of research. We suggest possibilities for further elaborating our argument, theoretically and empirically.