Structures of globalization: Evidence from the worldwide network of bilateral investment treaties (1959–2009)

Abstract

Existing sociological theories of international relations yield contrasting predictions for their structure that range from an increasingly dense and universally tied network to networks in which ties tend to concentrate within or between certain types of economically, politically or culturally defined blocs. We contribute to this growing body of empirical research by analyzing original data on the complete worldwide network of bilateral investment treaties (BITs) as it has evolved over the course of 50 years since its inception in 1959. We find that the number of BITs increases almost exponentially over time to include nearly all of the world’s countries. However, the density of ties between advanced capitalist and others is stronger than for any other dyadic types. We also find patterns of regional homophily, but only in Asia, East Asia, Postsocialist Europe and Eurasia, and North Africa/Middle East. These findings suggest that existing explanations of globalization are more complementary than contending. Theorizing about any particular global outcome thus requires attention to the simultaneity of material and cultural forces and the interplay of transnational and local socio-historical developments. Our analysis of the structure of the BIT network also helps explain the weak link between foreign direct investment and BITs discovered in previous research.