Do Investment Promotion Agencies Promote Bilateral Investment Treaties?

In this chapter, I examine whether state investment promotion agencies (IPAs) include bilateral investment treaties (BITs) in their marketing pitches to potential foreign investors. In other words, do BITs have a place in IPA strategies for presenting their state as a desirable place for foreign investment? And if they have a place, is it a prominent one? Many scholars suggest that BITs either are or have the theoretical capacity to be major drivers of foreign investment decisions. While existing studies typically examine statistical relationships between BITs and foreign investment flows to infer that BITs are important to investors, this study takes a different approach by examining whether states, acting through their IPAs, act as if BITs are important to investors. The study's basic empirical finding is easy to summarize: IPAs frequently fail to mention BITs at all on their websites and, when they do, BITs never appear as a central plank in the IPA's image-building efforts. Given the conventional wisdom that BITs are very important to investor decision-making, the failure of state IPAs to market their BIT commitments is surprising.I discuss two competing implications of the study. First, the findings may indicate that IPAs still have some work to do in crafting effective messages to potential investors. If conventional wisdom is correct, IPAs are making a potentially major error by failing to more prominently promote their states' BITs on their websites. In that case, this chapter may usefully serve as a reminder to IPA professionals to consider whether the prominence of BITs in their marketing campaigns should be increased