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Investor Rights versus Human Rights: Do Bilateral Investment Treaties Tilt the Scale?

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  • Bodea, Cristina
  • Ye, Fangjin

Abstract

This article argues that the broad and legally enforceable protection that bilateral investment treaties (BITs) offer to foreign investors worsens the human rights practices of developing countries. BITs lock in initial conditions attractive to investors that are linked to vertical investment flows and investment and trade competition. They also constrain the provision of welfare benefits or basic infrastructure. The lock-in and constraining effects are sources of popular grievance and dissent in states that host foreign investment. BIT-protected investor rights, however, limit the ability of governments to back-down vis-à-vis investors, lowering the relative cost of human rights violations. Finally, this study suggests that democratic regimes mitigate the negative effect of BITs. Evidence from 113 developing countries from 1981 to 2009 supports the hypotheses.

Suggested Citation

  • Bodea, Cristina & Ye, Fangjin, 2020. "Investor Rights versus Human Rights: Do Bilateral Investment Treaties Tilt the Scale?," British Journal of Political Science, Cambridge University Press, vol. 50(3), pages 955-977, July.
  • Handle: RePEc:cup:bjposi:v:50:y:2020:i:3:p:955-977_8
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    Cited by:

    1. Liu, Pengcheng & Lu, Yue & Sheng, Bin & Das, Khanindra Ch. & Li, Lei, 2021. "Can foreign direct investment promote BIT signing?," Journal of Asian Economics, Elsevier, vol. 75(C).
    2. Nicole Janz & Noel Johnston & Paasha Mahdavi, 2022. "Expropriation and human rights: does the seizure of FDI signal wider repression?," The Review of International Organizations, Springer, vol. 17(4), pages 847-875, October.

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