564 International Organization sovereignty of the host nation,to private bilateral or multilateral negotiations. This redefines the outcome of interest,so that colonialism is one of several possible results of home-home and home-host interaction;in other words,it describes variation in the dependent variable.The next step is to focus on the explanatory variable proposed,which is differing characteristics of interna- tional investment. The following section explores the impact of various kinds of international investments on the policies of potential colonial powers,up to and including colonialism.It ignores many other issues,such as investments among devel- oped countries,except where these impinge directly on the theme.The article also ignores potentially important noneconomic factors that might have affected colonial rule.I have done so only to delimit the problem in a manageable way;I certainly do not wish to deny the importance of other considerations,only to plead for the incorporation of certain economic concerns into explanations of a complex reality.Excluded from the analysis by design is consideration of military,geopolitical,technological,and a host of other factors.I have dealt with some of these in a limited way elsewhere;for now I focus on the economic nature of international investment.8 International investment,property rights, and international conflict The international politics of international investment are largely organized around two broad problems.The first is the desire of investors to monitor and enforce the host country's respect for cross-border property rights.The second is the degree to which different foreign investors engage in collective action to carry out these monitoring and enforcement activities. The security of property across borders is in essence a contractual problem. Overseas investment involves an implicit or explicit contract between the investor and the host state.9 This contract may commit a host government to 8.See Jeffry A.Fricden,"The Economics of Intervention:American Overseas Investments and Relations with Underdeveloped Areas,1890-1950,"Comparative Studies in Sociery and History 31 (January 1989),pp.55-80,which also presents some of the ideas contained in the present article. The facts that I exclude other potential explanatory variables from my analysis and that I do not weigh the large number of contending explanations are a problem only if there is reason to believe that one of the alternate explanatory variables is correlated with mine and may outperform it.One exception is the role of economic develapment,which is probably correlated with types of investment;indeed,in the essay cited above I suggest a complex interaction among development, foreign investment,and foreign intervention.In this context and more generally,it is nonetheless legitimate to argue for the validity of my hypotheses as part of a full explanation of the phenomena in question. 9.An explicit discussion of this concept,specifically in regard to sovereign lending,can be found in Vincent P.Crawford,Intematianal Lending,Long-ter Credit Relationships,and Dynamic Contract Theory Princeton Studies in International Finance,no.59 (Princcton,N.I.:International Finance Section,1987).Further references to this very large literature can be found therein