This paper models a multilateral agreement on investment (MAI) as a coordination device. Multinational enterprises can invest in any number of countries. Without a multilateral investment agreement, expropriation triggers an investment stop by the single MNE. Under a multilateral agreement,...

International investment agreements can have detrimental effects for developing countries: they can limit a government's ability to regulate in the public interest where this interest runs counter to that of foreign investors; they can severely restrict a country's ability to enact measures...