Who are the rule-takers and rule-makers in the African BIT universe? Using computational measures of textual similarity this paper provides a nuanced empirical answer to this question.

First, we find that African states tend to be rule-takers in North-South relations, yet enjoy greater agency in negotiations of South-South BITs. Only few African countries, however, use their greater say in intra-African negotiations to include public policy exceptions in BITs. Indeed, recent North-South BITs contain more policy space than their Southern counterparts in Africa.

Second, rule-makers and rule-takers also exist within the African South-South BIT landscape. Yet, in contrast to North-South relations, negotiation outcomes seem to be shaped more by expert knowledge than by power asymmetries. Powerful states like Egypt fail to dominate negotiations, while small-island-state Mauritius with its strategic investment policy agenda succeeds in setting the terms of investment agreements.

This paper thus provides a more nuanced view of the African treaty landscape, points to new areas of research and highlights the importance of technical expertise in achieving coherent treaty networks.

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Introduction

Prior studies suggest that bilateral investment treaties (BITs) often contain a distinctly “Northern” or developed country handwriting. BIT programs first originated in Europe,1 and as new countries, including from the developing world, jumped on the BIT bandwagon, they looked to European treaty practice for inspiration. Furthermore, empirical research has shown that, in general, developed countries are more successful than developing countries in achieving consistent treaty networks, which suggests that developed countries tend shape negotiation outcomes.

While it is thus well documented that, as a general matter, developed countries are the primary rule-makers in the universe of bilateral investment treaties, this does not preclude the existence of a distinctly “Southern” handwriting in parts of the BIT landscape. In particular, when bargaining power is more evenly distributed, as is the case of BITs concluded between two developed countries, we would expect that negotiation outcomes more clearly reflect developing countries’ policy preferences. Put differently, while developing countries may often be the rule-takers in NorthSouth BITs, they can become rule-makers in South-South agreements. In this paper, we use Africa, and in particular sub-Saharan Africa, as a case study to empirically verify this hypothesis tracing developing countries’ handwriting in BITs.

To what extent have African countries played an active role in the making and shaping of their bilateral investment treaties? To answer that question, we proceed in four stages. First, we introduce the challenges and opportunities developing countries face in investment treaty making generally drawing on the existing literature. We conclude that the main challenge for African countries is to make their voice heard in asymmetric North-South negotiations and that the main opportunities for shaping BITs lie in South-South treaties. With that framework in mind, we next introduce our methodology that employs computational text comparisons to reveal rule-takers and rule-makers in Africa. We then apply that method to compare African North-South agreements with African South-South agreements. We find that African countries indeed are less successful in shaping the terms of North-South negotiations and have a greater say in South-South BITs. In the past, African countries partially used their greater agency to integrate more public policy safeguards into their South-South treaties, while today most policy flexibility is imported from North-South Agreements. Finally, we look more specifically at who are the rule-makers and ruletakers in South-South African agreements. We find that economic power only plays a subsidiary role in determining outcomes of negotiations and that expert knowledge and strategic investment policy is more important in shaping treaty design.