This paper examines theoretically and empirically the role of political risk guarantees, which bilateral investment treaties serve, in debt accumulation in low and middle income countries. The paper empirically finds that signed bilateral investment treaties with OECD countries have a positive influence on total and guaranteed debt accumulation, under system GMM and OLS estimation methodologies. Results suggest that the role of bilateral investment treaties extends beyond attracting FDI to international lending.
Wesseem, Mina, "Beyond FDI: The Influence of Bilateral Investment Treaties on Debt" (2013). ICEPP Working Papers. 44.