402 International Organization receptiveness to outside investment and commit to protect whatever investment they receive.In turn,foreign investors should be more willing to invest in coun- tries who have signed BITs because of these additional protections.This is the standard account advanced in existing scholarship on the effects of BITs on FDI. Yet the investment-treaty story does not end once an agreement is signed.Instead, investors will look to see whether the promises made in the treaties are being upheld and will reevaluate their investment decisions as new information is revealed.Gov- ernments that sign BITs,then,could receive more or less investment in the years after they sign the treaties. To provide a more complete answer to the central question of whether these treaties are effective in generating greater investment,we shift the study of BIT effects in an important new direction by emphasizing compliance,or lack thereof, with the treaties.We inject an important,overlooked caveat to the claim that BITs should be beneficial:governments who sign BITs should receive greater FDI,but only if they are not later revealed to have violated their treaty commitments.Exist- ing studies typically record when a state signs a BIT and then examine whether more FDI flows to that state from that point onward.In effect,ongoing future compliance with the treaties is assumed.Yet this assumption is rendered problem- atic by the emergence of a significant number of investor-state disputes in which an investor explicitly claims that a BIT signatory is not complying with its treaty obligations.Therefore,compliance with the treaties,as revealed by the presence or absence of subsequent treaty-related disputes,should be a critical determinant of BITs'ability to stimulate greater investment. Our central claim is that the net investment effect of BITs is contingent upon the future behavior of the governments who sign them.Investment treaties should stimulate greater investment flows into signatories provided that no new informa- tion arises that contradicts the investor-friendliness signified by the treaty.How- ever,given the substantial uncertainty that surrounds investment decisions,any new information that reveals a weak host-state commitment to respect FDI could damage that state's reputation in the eyes of investors.Once an investment dispute emerges,investors will rethink their assessments of political risk in the "defen- dant"country and be less likely to invest in a country with a now questionable track record. The key cog in this theoretical account is the international arbitration institu- tion,which reveals information to investors about whether governments are uphold- ing the terms of the treaties.These legal institutions,which are largely neglected in FDI studies within political science and economics,generate new information that is salient to investors as long as the cases taken before them are observable and legal judgments are not rendered confidentially.Most disputes arising from BITs are taken before the International Centre for the Settlement of Investment Disputes (ICSID),a prominent and heavily utilized arbitral institution affiliated with the World Bank.The ICSID arbitration process transmits information to global investors and thus has the potential to reduce future investment in two ways.First, the mere appearance of a government before an arbitration venue like ICSID sendsreceptiveness to outside investment and commit to protect whatever investment they receive+ In turn, foreign investors should be more willing to invest in coun￾tries who have signed BITs because of these additional protections+ This is the standard account advanced in existing scholarship on the effects of BITs on FDI+ Yet the investment-treaty story does not end once an agreement is signed+ Instead, investors will look to see whether the promises made in the treaties are being upheld and will reevaluate their investment decisions as new information is revealed+ Gov￾ernments that sign BITs, then, could receive more or less investment in the years after they sign the treaties+ To provide a more complete answer to the central question of whether these treaties are effective in generating greater investment, we shift the study of BIT effects in an important new direction by emphasizing compliance, or lack thereof, with the treaties+ We inject an important, overlooked caveat to the claim that BITs should be beneficial: governments who sign BITs should receive greater FDI, but only if they are not later revealed to have violated their treaty commitments+ Exist￾ing studies typically record when a state signs a BIT and then examine whether more FDI flows to that state from that point onward+ In effect, ongoing future compliance with the treaties is assumed+ Yet this assumption is rendered problem￾atic by the emergence of a significant number of investor-state disputes in which an investor explicitly claims that a BIT signatory is not complying with its treaty obligations+ Therefore, compliance with the treaties, as revealed by the presence or absence of subsequent treaty-related disputes, should be a critical determinant of BITs’ ability to stimulate greater investment+ Our central claim is that the net investment effect of BITs is contingent upon the future behavior of the governments who sign them+ Investment treaties should stimulate greater investment flows into signatories provided that no new informa￾tion arises that contradicts the investor-friendliness signified by the treaty+ How￾ever, given the substantial uncertainty that surrounds investment decisions, any new information that reveals a weak host-state commitment to respect FDI could damage that state’s reputation in the eyes of investors+ Once an investment dispute emerges, investors will rethink their assessments of political risk in the “defen￾dant” country and be less likely to invest in a country with a now questionable track record+ The key cog in this theoretical account is the international arbitration institu￾tion, which reveals information to investors about whether governments are uphold￾ing the terms of the treaties+ These legal institutions, which are largely neglected in FDI studies within political science and economics, generate new information that is salient to investors as long as the cases taken before them are observable and legal judgments are not rendered confidentially+ Most disputes arising from BITs are taken before the International Centre for the Settlement of Investment Disputes ~ICSID!, a prominent and heavily utilized arbitral institution affiliated with the World Bank+ The ICSID arbitration process transmits information to global investors and thus has the potential to reduce future investment in two ways+ First, the mere appearance of a government before an arbitration venue like ICSID sends 402 International Organization