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Download the Paper (386 K, PDF file) - April 30, 2007 Tell a colleague about it. Printing Tips: Select 'print as image' in the Acrobat print dialog if you have trouble printing.

ABSTRACT:
This paper presents a new theory that explains why developing countries have been entering into Bilateral Investment Treaties in the last 50 years. It disputes Andrew Guzman’s account which depicts the BIT generation as a result of a prisoner’s dilemma among developing countries. As explained here, the BIT “game” differs from a prisoner’s dilemma in two key ways. First, the BIT game has a sequential/evolutionary nature, stemming from the fact that developing countries have been joining (and rejecting) the network at various times since 1959. Second, unlike the prisoner’s dilemma, the BIT system demonstrates the positive externalities or network effects of having one system of treaties defined in closely similar terms. Taking into account those two differences leads to the emergence of a new theory: the BIT generation as a virtual network.

SUGGESTED CITATION:
Santiago Montt, "THE BIT GENERATION’S EMERGENCE AS A COLLECTIVE ACTION PROBLEM: Prisoner's dilemma or network effects?" (April 30, 2007). Berkeley Program in Law & Economics. Latin American and Caribbean Law and Economics Association (ALACDE) Annual Papers. Paper 043007-3.
http://repositories.cdlib.org/bple/alacde/043007-3