| This dissertation seeks to explain why international investment agreements, despite being created with the same purposes and functions in mind, often display important variation in their degree of legalization. I posit that such variation exists because legalization creates a trade-off - between making credible commitments to foreign investors and retaining autonomous control over investment policies - that governments choose to resolve differently. Therefore, to explain the legalization of investment agreements, I develop a theory which explains how governments resolve the credibility-autonomy trade-off, leading them to conclude agreements with varying levels of legalization.;My core argument is that governments' willingness to submit to extensive constraints on their policy autonomy is shaped powerfully by their time horizons. Governments with long time horizons prize having greater autonomy to modify policies that shape the effect that foreign investment has on their economies in response to shifts in economic and political conditions that can occur over time. Governments with shorter time horizons, on the other hand, do not anticipate being in power long into the future and therefore are less concerned about maintaining greater policy freedom. Therefore, I hypothesize that when BITs are signed by governments with long time horizons, their level of legalization will be calibrated to promote greater policy autonomy than when they are concluded by governments with short time horizons. In addition, I argue that domestic political and institutional variables such as regime type, party institutionalization, and autocratic regime structure are critical in framing leaders' time horizons, and thus establish a theoretical link between domestic politics and the legalization of international investment institutions.;To evaluate my argument, I use original data on the design features of a random sample of 346 bilateral investment treaties (BITs). Using this data, I construct original measures of the degree of legalization with respect to its three dimensions - obligation, delegation and precision. Using quantitative methods of analysis, I find a robust relationship between the time horizons of governments and the degree of legalization of the BITs they conclude. Specifically, governments with long time horizons are more likely to conclude BITs at a level of legalization that promotes greater policy autonomy. In the case of obligation and precision, this holds with respect to net importers of dyadic FDI, and in the case of delegation, I find that the time horizons of net exporters display a statistically stronger relationship with legalization. These results hold across regime types and are robust to controlling for selection into BITs and a range of control variables. |
