Do Bilateral Investment Treaties Attract Foreign Direct Investment? Only a Bit ... and They Could Bite
Touted as an important commitment device that attracts foreign investors, the number of bilateral investment treaties (BITs) ratified by developing countries has grown dramatically. The author tests empirically whether BITs have actually had an imp...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2003/08/2507711/bilateral-investment-treaties-attract-foreign-direct-investment-only-bit-bite http://hdl.handle.net/10986/18118 |
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okr-10986-181182021-04-23T14:03:41Z Do Bilateral Investment Treaties Attract Foreign Direct Investment? Only a Bit ... and They Could Bite Hallward-Driemeier, Mary BILATERAL TRADE AGREEMENTS FOREIGN DIRECT INVESTMENTS TREATY LAW INSTITUTIONAL ARRANGEMENTS INVESTMENT ENVIRONMENT PROPERTY RIGHTS TREATY RATIFYING DOMESTIC INVESTMENT INVESTMENT POLICY INVESTMENT PROMOTION INVESTMENT REGULATION AGREEMENTS ACTIONS ADVERSE SELECTION AUTHORITY BANKRUPTCY BILATERAL ARRANGEMENTS BILATERAL INVESTMENT BILATERAL INVESTMENT TREATIES BILATERAL INVESTMENT TREATY CORRUPTION DEMOCRACY DEVELOPED COUNTRIES DISPUTE RESOLUTION DOMESTIC INSTITUTIONS DOMESTIC INVESTORS ECONOMIC CHANGE EXPROPRIATION FDI FINANCIAL POSITION FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT FOREIGN INVESTOR FOREIGN INVESTORS FREE TRADE FREE TRADE AREA HOST COUNTRIES HOST COUNTRY IMMUNITY INFLATION INSTITUTIONAL CAPACITY INSURANCE INTERNATIONAL INVESTMENT INVESTMENT AGREEMENTS INVESTMENT CLIMATE INVESTMENT DISPUTES INVESTMENT FLOWS INVESTOR PROTECTIONS LAW JOURNALS LAWYERS LEGAL RECOURSE LITIGATION LOWERING TRADE MACROECONOMIC STABILITY POLICY MAKERS POTENTIAL INVESTORS PRECEDENTS PROFITABILITY PROPERTY RIGHTS PROTECTIONS PUBLIC AUTHORITIES PUBLIC DEBATE PUBLIC INTEREST REGIONAL INTEGRATION RULE OF LAW SOVEREIGN IMMUNITY STATEMENTS SUSTAINABLE DEVELOPMENT TAX INCENTIVES TAXATION TRADE AGREEMENT TRADE AGREEMENTS TRADE BARRIERS TRADE LAW TRADE POLICY ACTIONS AGREEMENTS Touted as an important commitment device that attracts foreign investors, the number of bilateral investment treaties (BITs) ratified by developing countries has grown dramatically. The author tests empirically whether BITs have actually had an important role in increasing the foreign direct investment (FDI) flows to signatory countries. While half of OECD FDI into developing countries by 2000 was covered by a BIT, this increase is accounted for by additional country pairs entering into agreements rather than signatory hosts gaining significant additional FDI. The results also indicate that such treaties act more as complements than as substitutes for good institutional quality and local property rights, the rationale often cited by developing countries for ratifying BITs. The relevance of these findings is heightened not only by the proliferation of such treaties, but by recent high profile legal cases. These cases show that the rights given to foreign investors may not only exceed those enjoyed by domestic investors, but expose policymakers to potentially large-scale liabilities and curtail the feasibility of different reform options. Formalizing relationships and protecting against dynamic inconsistency problems are still important, but the results should caution policymakers to look closely at the terms of agreements. 2014-04-30T19:28:03Z 2014-04-30T19:28:03Z 2003-08 http://documents.worldbank.org/curated/en/2003/08/2507711/bilateral-investment-treaties-attract-foreign-direct-investment-only-bit-bite http://hdl.handle.net/10986/18118 English en_US Policy Research Working Paper;No. 3121 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
BILATERAL TRADE AGREEMENTS FOREIGN DIRECT INVESTMENTS TREATY LAW INSTITUTIONAL ARRANGEMENTS INVESTMENT ENVIRONMENT PROPERTY RIGHTS TREATY RATIFYING DOMESTIC INVESTMENT INVESTMENT POLICY INVESTMENT PROMOTION INVESTMENT REGULATION AGREEMENTS ACTIONS ADVERSE SELECTION AUTHORITY BANKRUPTCY BILATERAL ARRANGEMENTS BILATERAL INVESTMENT BILATERAL INVESTMENT TREATIES BILATERAL INVESTMENT TREATY CORRUPTION DEMOCRACY DEVELOPED COUNTRIES DISPUTE RESOLUTION DOMESTIC INSTITUTIONS DOMESTIC INVESTORS ECONOMIC CHANGE EXPROPRIATION FDI FINANCIAL POSITION FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT FOREIGN INVESTOR FOREIGN INVESTORS FREE TRADE FREE TRADE AREA HOST COUNTRIES HOST COUNTRY IMMUNITY INFLATION INSTITUTIONAL CAPACITY INSURANCE INTERNATIONAL INVESTMENT INVESTMENT AGREEMENTS INVESTMENT CLIMATE INVESTMENT DISPUTES INVESTMENT FLOWS INVESTOR PROTECTIONS LAW JOURNALS LAWYERS LEGAL RECOURSE LITIGATION LOWERING TRADE MACROECONOMIC STABILITY POLICY MAKERS POTENTIAL INVESTORS PRECEDENTS PROFITABILITY PROPERTY RIGHTS PROTECTIONS PUBLIC AUTHORITIES PUBLIC DEBATE PUBLIC INTEREST REGIONAL INTEGRATION RULE OF LAW SOVEREIGN IMMUNITY STATEMENTS SUSTAINABLE DEVELOPMENT TAX INCENTIVES TAXATION TRADE AGREEMENT TRADE AGREEMENTS TRADE BARRIERS TRADE LAW TRADE POLICY ACTIONS AGREEMENTS |
| spellingShingle |
BILATERAL TRADE AGREEMENTS FOREIGN DIRECT INVESTMENTS TREATY LAW INSTITUTIONAL ARRANGEMENTS INVESTMENT ENVIRONMENT PROPERTY RIGHTS TREATY RATIFYING DOMESTIC INVESTMENT INVESTMENT POLICY INVESTMENT PROMOTION INVESTMENT REGULATION AGREEMENTS ACTIONS ADVERSE SELECTION AUTHORITY BANKRUPTCY BILATERAL ARRANGEMENTS BILATERAL INVESTMENT BILATERAL INVESTMENT TREATIES BILATERAL INVESTMENT TREATY CORRUPTION DEMOCRACY DEVELOPED COUNTRIES DISPUTE RESOLUTION DOMESTIC INSTITUTIONS DOMESTIC INVESTORS ECONOMIC CHANGE EXPROPRIATION FDI FINANCIAL POSITION FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT FOREIGN INVESTOR FOREIGN INVESTORS FREE TRADE FREE TRADE AREA HOST COUNTRIES HOST COUNTRY IMMUNITY INFLATION INSTITUTIONAL CAPACITY INSURANCE INTERNATIONAL INVESTMENT INVESTMENT AGREEMENTS INVESTMENT CLIMATE INVESTMENT DISPUTES INVESTMENT FLOWS INVESTOR PROTECTIONS LAW JOURNALS LAWYERS LEGAL RECOURSE LITIGATION LOWERING TRADE MACROECONOMIC STABILITY POLICY MAKERS POTENTIAL INVESTORS PRECEDENTS PROFITABILITY PROPERTY RIGHTS PROTECTIONS PUBLIC AUTHORITIES PUBLIC DEBATE PUBLIC INTEREST REGIONAL INTEGRATION RULE OF LAW SOVEREIGN IMMUNITY STATEMENTS SUSTAINABLE DEVELOPMENT TAX INCENTIVES TAXATION TRADE AGREEMENT TRADE AGREEMENTS TRADE BARRIERS TRADE LAW TRADE POLICY ACTIONS AGREEMENTS Hallward-Driemeier, Mary Do Bilateral Investment Treaties Attract Foreign Direct Investment? Only a Bit ... and They Could Bite |
| relation |
Policy Research Working Paper;No. 3121 |
| description |
Touted as an important commitment device
that attracts foreign investors, the number of bilateral
investment treaties (BITs) ratified by developing countries
has grown dramatically. The author tests empirically whether
BITs have actually had an important role in increasing the
foreign direct investment (FDI) flows to signatory
countries. While half of OECD FDI into developing countries
by 2000 was covered by a BIT, this increase is accounted for
by additional country pairs entering into agreements rather
than signatory hosts gaining significant additional FDI. The
results also indicate that such treaties act more as
complements than as substitutes for good institutional
quality and local property rights, the rationale often cited
by developing countries for ratifying BITs. The relevance of
these findings is heightened not only by the proliferation
of such treaties, but by recent high profile legal cases.
These cases show that the rights given to foreign investors
may not only exceed those enjoyed by domestic investors, but
expose policymakers to potentially large-scale liabilities
and curtail the feasibility of different reform options.
Formalizing relationships and protecting against dynamic
inconsistency problems are still important, but the results
should caution policymakers to look closely at the terms of agreements. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Hallward-Driemeier, Mary |
| author_facet |
Hallward-Driemeier, Mary |
| author_sort |
Hallward-Driemeier, Mary |
| title |
Do Bilateral Investment Treaties Attract Foreign Direct Investment? Only a Bit ... and They Could Bite |
| title_short |
Do Bilateral Investment Treaties Attract Foreign Direct Investment? Only a Bit ... and They Could Bite |
| title_full |
Do Bilateral Investment Treaties Attract Foreign Direct Investment? Only a Bit ... and They Could Bite |
| title_fullStr |
Do Bilateral Investment Treaties Attract Foreign Direct Investment? Only a Bit ... and They Could Bite |
| title_full_unstemmed |
Do Bilateral Investment Treaties Attract Foreign Direct Investment? Only a Bit ... and They Could Bite |
| title_sort |
do bilateral investment treaties attract foreign direct investment? only a bit ... and they could bite |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2003/08/2507711/bilateral-investment-treaties-attract-foreign-direct-investment-only-bit-bite http://hdl.handle.net/10986/18118 |
| _version_ |
1764438898390335488 |