International Organisations and Economic Policy: UNCTAD and the Spread of South-South BITs

The over 3,000-strong network of Bilateral Investment Treaties (BITs) forms the international investment regime as we understand it today. BITs have been widely adopted by countries with the expectation that they increase inward foreign direct investment (FDI). Interestingly, the late 1990s saw a proliferation of South-South BITs or BITs signed between capital-poor developing countries themselves -- often with little prospect for mutual investment flows. What explains these strange treaties? This paper examines the role of the United Nations Conference on Trade and Development (UNCTAD) in the spread of South-South BITs among developing countries. Experimental group sociology (Sherif, 1936) suggests that under conditions of uncertainty, individuals conform not only due to peer pressure but also because they rely on peers for advice - particularly those possessing expertise. Indeed, “(o)ne reason we conform is that we often lack much information of our own, and the decisions of others provide the best available information about what should be done” (Sunstein, 2002, p.2). This paper explores the relative influence of international organisations in the politics of numbers, and the implications for global economic governance.