The Monarchic Advantage: Regime Type, Oil and Bilateral Investment Treaties in the Middle East and North Africa

How do domestic political and economic configurations in the Middle East and North Africa (MENA) influence their foreign investment policy, particularly the design of bilateral investment treaties (BITs)? Building on the emerging literature that explores institutional variation among autocracies and its influence on foreign policy, this research challenges the binary approach frequently employed in International Relations (IR) studies when analysing the relationship between regime type and state behaviour. The study argues that certain MENA autocracies rely more heavily on external commitment mechanisms, leading them to adopt stronger investor protections in their BITs. Drawing upon International Political Economy (IPE) and MENA scholarship, this study utilizes the most comprehensive dataset of MENA BITs to date, of over 800 treaties from 19 MENA countries. The findings reveal significant differences between monarchies and presidential regimes and, to a lesser extent, between oil-rich and oil-poor countries, in their approaches to balancing investor protections with policy autonomy. Oil-rich presidential regimes tend to favour stronger formulations of two pivotal protections—the Most-Favored-Nation and Fair and Equitable Treatment standards—as external mechanisms to establish credible commitments to foreign investors. Conversely, oil-rich monarchies, in less need for such external mechanisms, tend to opt for the weakest investor protections.