Ratification Matters: The Domestic Fate of Bilateral Investment Treaties

1. Ratification Matters:The Domestic Fate of Bilateral Investment Treaties Yoram Z. Haftel Alexander Thompson U. of Illinois-Chicago Ohio State University yhaftel@uic.eduThompson.1191@osu.edu The annual national conference of the International Political Economy Society Philadelphia, November 14-15, 2008

2. Question • Why are some treaties signed and then ratified quickly, while others languish at the domestic level or are never ratified at all? • What explains variation in the time between signature and mutual ratification of bilateral investment treaties (BITs)

3. Why Ratification Matters • A key but overlooked stage of cooperation • Unique strategic problems at nexus of domestic and international levels • Signature and ratification perform distinct functions, legally and politically

4. Hypotheses • Formal Legislative Hurdles • Greater legal hurdles lengthen time to ratification • Domestic Political Constraints • Greater constraints on executive lengthen time to ratification • Rational Anticipation • Ratification obstacles anticipated before or during negotiation stage • Constraints have no bearing on ratification or may even decrease time to ratification

5. BITs’ Entry into Force • 1,745 BITs from 1959 to 1999 • 1,233 (70%) in force by 1999 • Mean time to mutual ratification: 1.76 years • 512 BITs not in force by 1999 • Mean time since conclusion: 2.53 years

6. Data and Research Design • Event history (Cox Proportional Hazard) • DV: spell of mutual ratification • IVs: • Legislative hurdles (Hathaway 2008) • Political constraints • Democracy • Common law • Control variables (Elkins et al. 2006)

8. Substantive Effect of Legislative Hurdles

9. Conclusion • Formal legal hurdles clearly matter • Mixed findings on domestic political constraints; democracy may even speed ratification • Rational anticipation: Transparent countries with high capacity effectively anticipate and address ratification obstacles • Much work remains • National ratification dates • Role of treaty design (sovereignty costs, scope)

11. Summary Statistics

12. 0 No legislative approval required (e.g., Atingua-Barbuda, Israel, Libya) 1 Majority in one house required (e.g., Armenia, Greece, Panama) 2   Majority in two houses required (e.g., Argentina, Czech R., Malaysia) Supermajority in one house required (e.g., Algeria, Iraq, Micronesia, U.S.) Supermajority in two houses required ( Burundi) Histogram of Legislative Hurdles

13. Predicted Hazard Ratio