406 International Organization Various studies have begun to employ empirical approaches that test theoretical mechanisms more directly.For instance,Tobin and Rose-Ackerman interact a BIT variable with various indicators for the political risk or level of development of treaty signatories to determine whether BITs have a greater effect on FDI in coun- tries where political risk is high or development is low.8 Egger and Pfaffermayr, as well as Haftel,distinguish in their measurement strategy between signed and ratified BITs-with the logic that the former can only serve as signals whereas the latter represent more credible commitments.Our approach similarly advances and tests precise arguments regarding the impact of BITs by focusing not just on treaties,but also on the information environment created by the use of inter- national arbitration to solve investment disputes.This approach stands in contrast to other studies of investment treaty impacts and reintegrates the BIT literature with the larger focus on compliance in international law and organization. The Importance of BIT Compliance Our foundational claim is that BITs should only be credible-and generate greater FDI-for those signatories for whom no evidence emerges of behavior that con- tradicts the letter of the law.Therefore,we introduce compliance as an important, yet omitted,concept within the study of BITs.Simply put,whether the desired gains encoded in investment and other treaties are realized depends on whether governments live up to the commitments stipulated in the agreements.20 Existing studies of the FDI effects of BITs fail to include compliance as an explanatory variable,despite the fact that treaty compliance is a major theme in international relations scholarship on the environment,21 trade agreements,22 and current account liberalization.23 In fact,the dominant approach toward evaluating the BIT-FDI relationship not only neglects compliance but implicitly assumes that governments automatically comply with all of their concluded BITs.In effect,once a treaty enters into force,it is recorded and entered into empirical tests without any follow up to see whether the signatories actually adhere to their BIT-related commitments.But the reality is that not all governments comply with the BITs they have signed.The hundreds of investment disputes that have been arbitrated under BIT guidelines suggest that any assumption of widespread compliance is untenable.Therefore,the issue of compliance with BITs needs to be incorporated directly into our theories and empirical tests. 18.Tobin and Rose-Ackerman 2005. 19.See Egger and Pfaffermayr 2004;and Haftel 2010. 20.International law scholars often downplay such worries about compliance,and reference the widespread norm that treaties should be followed (pacta sunt servanda).See Chayes and Chayes 1993; and Koh 1997.For the contrasting perspective from international relations scholars,see Downs,Rocke, and Barsoom 1996. 21.Brown Weiss and Jacobson 2000. 22.Downs and Rocke 1995. 23.Simmons 2000.Various studies have begun to employ empirical approaches that test theoretical mechanisms more directly+ For instance, Tobin and Rose-Ackerman interact a BIT variable with various indicators for the political risk or level of development of treaty signatories to determine whether BITs have a greater effect on FDI in coun￾tries where political risk is high or development is low+ 18 Egger and Pfaffermayr, as well as Haftel, distinguish in their measurement strategy between signed and ratified BITs—with the logic that the former can only serve as signals whereas the latter represent more credible commitments+ 19 Our approach similarly advances and tests precise arguments regarding the impact of BITs by focusing not just on treaties, but also on the information environment created by the use of inter￾national arbitration to solve investment disputes+ This approach stands in contrast to other studies of investment treaty impacts and reintegrates the BIT literature with the larger focus on compliance in international law and organization+ The Importance of BIT Compliance Our foundational claim is that BITs should only be credible—and generate greater FDI—for those signatories for whom no evidence emerges of behavior that con￾tradicts the letter of the law+ Therefore, we introduce compliance as an important, yet omitted, concept within the study of BITs+ Simply put, whether the desired gains encoded in investment and other treaties are realized depends on whether governments live up to the commitments stipulated in the agreements+ 20 Existing studies of the FDI effects of BITs fail to include compliance as an explanatory variable, despite the fact that treaty compliance is a major theme in international relations scholarship on the environment, 21 trade agreements, 22 and current account liberalization+ 23 In fact, the dominant approach toward evaluating the BIT-FDI relationship not only neglects compliance but implicitly assumes that governments automatically comply with all of their concluded BITs+ In effect, once a treaty enters into force, it is recorded and entered into empirical tests without any follow up to see whether the signatories actually adhere to their BIT-related commitments+ But the reality is that not all governments comply with the BITs they have signed+ The hundreds of investment disputes that have been arbitrated under BIT guidelines suggest that any assumption of widespread compliance is untenable+ Therefore, the issue of compliance with BITs needs to be incorporated directly into our theories and empirical tests+ 18+ Tobin and Rose-Ackerman 2005+ 19+ See Egger and Pfaffermayr 2004; and Haftel 2010+ 20+ International law scholars often downplay such worries about compliance, and reference the widespread norm that treaties should be followed ~ pacta sunt servanda!+ See Chayes and Chayes 1993; and Koh 1997+ For the contrasting perspective from international relations scholars, see Downs, Rocke, and Barsoom 1996+ 21+ Brown Weiss and Jacobson 2000+ 22+ Downs and Rocke 1995+ 23+ Simmons 2000+ 406 International Organization