When the Claim Hits: Bilateral Investment Treaties and Bounded Rational Learning
AbstractUsing the international investment regime as its point of departure, the paper introduces notions of bounded rationality to the study of economic diplomacy. Through a multi-method approach, it shows that developing countries often ignored the risks of bilateral investment treaties (BITs) until they themselves became subject to an investment treaty claim. Thus the behavior of developing country governments with regard to the international investment regime is consistent with that observed for individuals in experiments and field studies: they tend to ignore high-impact, low-probability risks if they cannot bring specific 'vivid' instances to mind.
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Bibliographic InfoPaper provided by Crawford School of Public Policy, The Australian National University in its series Crawford School Research Papers with number 1105.
Length: 50 pages
Date of creation: Jun 2011
Date of revision:
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Web page: https://crawford.anu.edu.au/research/crwf_ssrn/
More information through EDIRC
bounded rationality; international political economy; international economic law; bilateral investment treaties;
Find related papers by JEL classification:
- D03 - Microeconomics - - General - - - Behavioral Microeconomics; Underlying Principles
- F00 - International Economics - - General - - - General
- F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F20 - International Economics - - International Factor Movements and International Business - - - General
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
- F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
- F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
- K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-10-01 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Beck, T.H.L. & Clarke, G. & Groff, A. & Keefer , P. & Walsh, P., 2001. "New tools in comparative political economy: The database of political institutions," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3125517, Tilburg University.
- Bergstrand, Jeffrey H. & Egger, Peter, 2013.
"What determines BITs?,"
Journal of International Economics,
Elsevier, vol. 90(1), pages 107-122.
- Levy, Jack S., 1994. "Learning and foreign policy: sweeping a conceptual minefield," International Organization, Cambridge University Press, vol. 48(02), pages 279-312, March.
- Busch, Marc L. & Reinhardt, Eric & Shaffer, Gregory, 2009. "Does legal capacity matter? A survey of WTO Members," World Trade Review, Cambridge University Press, vol. 8(04), pages 559-577, October.
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