Leader Survival, Regime Type and Bilateral Investment Treaties∗

The accumulation of capital is essential for economic development, but investors face risk when committing their capital to productive use. Bilateral Investment Treaties (BITs) help devel-oping country leaders commit to limit their expropriation. Democratic states with functional domestic courts, strong reputations and transparency in policymaking all make commitments to protect foreign investment credible. Autocratic countries, where the domestic rule of law, or the independence of the courts cannot be relied upon suffer from a weak reputation for protec-tion of foreign investment. It is these countries and leaders that have the most to gain from signing BITs. Survival models show that BITs enhance leader survival by more in autocracies relative to democracies, and that institutionalized autocratic leaders have less to gain in terms of survival from BITs signing than do personalistic dictators. Using credit-worthiness scores and event-studies, we also show that BIT signing improves leader survival via improving the domestic investment climate. ∗Thanks to Lex Peel for research assistance and Leonardo Baccini for sharing his data. Thanks to Krzysztof Pelc