Cooperative Autocracies: Leader Survival, Creditworthiness, and Bilateral Investment Treaties*

Capital accumulation is essential for economic development, but investors face risk when putting their capital to productive use. Bilateral investment treaties (BITs) commit leaders to limiting their takings of foreign assets and the revenues they generate. We offer theory and evidence that BITs enhance leader survival more in autocracies than democracies. BITs improve the “investment climate” in signatory states, and they do so by more in autocratic polities. Hazard models offer supporting evidence of improved autocratic leader survival. The improvement in the investment climate is evidenced by improvement of creditworthiness scores and higher sovereign bond prices, again with greater effect in autocratic states. Autocratic leaders have the most to gain from importing property rights–enhancing institutions.