International Political Economy

Can I Stay a BIT Longer? The Effect of Bilateral Investment Treaties on Political Survival

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Replication Materials

(The Review of International Organizations)

Bilateral Investment Treaties (BITs) have proliferated throughout the international system. While ostensibly commercial in purpose, do BITs have domestic political ramifications? I argue that BITs affect a leader’s tenure through their effect on the property rights environment in developing countries. BITs, by segmenting a country’s property rights environment for foreign and domestic firms, reduce the incentive for foreign firms to lobby for property rights protections in the host country thus leading to a stagnating domestic property rights environment. In autocracies, a stagnating domestic property rights regime benefits domestic business elites who can continue to stymie small and medium enterprises (SMEs). The political benefits of BITs, however, decrease as a country becomes more democratic. Using a dataset of developing country leaders over the period 1965-2011, I find support for my hypothesis that BITs are associated with a decreased hazard of losing office and that the effect diminishes with higher levels of democracy. My results highlight the consequences of the legalization of global investment on the domestic political economy.

Autocracies and the International Sources of Cooperation

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(Journal of Peace Research)

Under what conditions do autocracies peacefully settle disputes? This study argues that as autocracies become more central in the network of liberal institutions such as Pref- erential Trade Agreements (PTAs), they are less likely to initiate a Militarized Interstate Dispute (MID). As a state becomes more democratic, the effect of centrality within the PTA network on the peaceful dispute settlement dissipates. This is because greater embed- dedness in the PTA regime is associated with enhanced transparency for autocracies, which allows autocracies to mitigate ex ante informational problems in dispute resolution. Using a dataset of MID initiation from 1965-1999, this study finds robust empirical support for the aforementioned hypothesis. Moreover, the results are substantively significant as well. Further analysis into the causal mechanisms at work provides evidence in favor of the information mechanism. The results suggest that an autocrat’s structural position within the international system can help to peacefully settle its disputes.

Does Foreign Aid Work? Evidence from a Natural Experiment in International Relations

with James Raymond Vreeland

Can foreign aid push governments to adopt policies that they otherwise would not have? This question is fundamental to understanding the efficacy of foreign aid as a foreign policy tool; yet, the key inferential problem is that donor states strategically target aid to recipient countries thus confounding the relationship between foreign aid and policy outcomes. To help adjudicate the current debate on the efficacy of foreign aid, we propose a design-based strategy to overcome the problem of endogenous selection of foreign aid. Using the exogenous rotation of the Presidency of the Council of the European Union (EU), we leverage this quasi- experimental setting and pursue an instrumental variables strategy to analyze the policy effects of foreign aid. Particularly, we use our instrumental variables identification strategy to revisit three main policy areas that scholars tend to focus on: democratization, human rights, and trade policy. Our preliminary results indicate that foreign aid, at least from the EU, is effective in inducing changes in human rights and trade policy but not democratization. The results of this study contribute to the broader literature on the political economy of foreign policy by providing valid causal estimates of the effect of foreign aid on policy change.