Since Tony Blair launched the Extractive Industries Transparency Initiative (EITI) in 2003, an increasing number of resource-rich states endorsed the initiative despite the potential political costs of transparency. The growing popularity of the EITI is remarkable and puzzling at the same time. Why do even authoritarian and corrupt governments join the EITI? The cross-national analysis in this paper shows that the decision to join the EITI is partly motivated by global competition for foreign direct investment. Specifically, based on series of logistic regressions, the paper finds out that states, which depend on foreign direct investment (FDI) for economic growth, are more likely to be affiliated with the initiative. Leaders of resource-rich countries use the EITI to consolidate their international prestige as eager reformers, which serves to maintain and lure foreign investment.
