Partisanship and Economic Cooperation: Does Political Ideology Matter?

Does the partisanship of governing coalitions matter in determining patterns of economic cooperation between countries? A vast political economy literature suggests that differences in the partisanship of a government explains a broad array of domestic public policies. However, the topic is insufficiently addressed by international relations scholars and mixed results abound. In this paper, we propose to evaluate the relationship between government partisanship, based on ideological measures for heads of governments, and economic cooperation between countries, observing their behavior concerning Bilateral Investment Treaties (BITs). When analyzing BITs signed between 1990 and 2015 between 164 countries, we found evidence that a government's partisanship does not explain the probability of signing such agreements. Nevertheless, when observing the phenomena in a dyadic framework and conditioning on the partner's partisanship, the results demonstrate that governments who share similar ideological views cooperate more, or at least are more likely to sign BITs with each other. Additionally, the ideological alignment hypothesis seems to be stronger between the governments of developing countries and countries with left-wing governments. This study therefore makes an important empirical contribution to the literature by stressing the role played by ideology in international cooperation and unveiling competing explanations for BIT formation.