Investment Treaties, Local Institutions and Policies in the Global Land Rush

Jul 19, 2026

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Large-scale land acquisitions (LSLAs) in low- and middle-income countries are examined through the lens of bilateral investment treaties (BITs), the strength of recipient-country institutions, and local environmental regulations. Using 2002–2012 data in a gravity framework with country-pair and time fixed effects, the study finds BITs correlate with a 96–149% rise in land deals. Environmental protection index increases associate with sizable reductions in leased or purchased land amounts.

LanguageEnglish

CategoryResearch & Report

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Pages24

Reading Time1 h 0 min

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Abstract

Introduction

Pub lic Disclosure Authorized Pub lic Disclosure Authorized The World Bank Economic Review, 36(3), 2022, 559–582 [https://doi.org10.1093/wber/lhac004](https://doi.org10.1093/wber/lhac004) Article Investment Treaties, Local Institutions and Policies in the Global Land Rush Sebastian Anti Abstract Large-scale land acquisitions (LSLAs) are large tracts of land purchased or leased in low-and middle-income countries by multinational firms. This study examines whether these firms respond to the presence of bilateral investment treaties (BITs), whether BITs reinforce or undermine institutions in this process, and whether these firms respond to recipient-country environmental regulations. It analyzes data on LSLAs, BITs, and environmental policies from 2002 to 2012 in a gravity framework controlling for country-pair and time fixed effects. It finds a BIT is associated with a 96 to 149 percent increase in land deals and a 1 point increase in a recipient country’s environmental protection index is associated with around a 36 percent decrease in the total amount of land investors lease or purchase in a country. Interactions between BITs and institutional measures in recipient countries yield large relationships with the number of LSLA deals between countries, although these are statistically insignificant. JEL classification: F55, F21, F23, Q15 Keywords: land investment, multinational corporations, environmental policy, bilateral investment treaties 1. Introduction In 2009 the government of Madagascar offered Daewoo Logistics Corporation of South Korea a 99-year lease on 1.3 million hectares of land, over half the arable land of Madagascar. This led to protests that contributed to the collapse of the presidential administration in the country. While this is perhaps the best-known attempt at a large-scale land acquisition (LSLA), an investment in a large tract of land in the global South1 by a multinational company, it was part of a broad global trend starting circa 2000 . Available data suggest that the total combined area of LSLAs through 2021 is a little larger than the territory of Myanmar (Land Matrix 2017a) . There have been a number of recent studies on the determinants of LSLA investment flows around the world (Arezki, Deininger, and Selod 2015; Kareem 2018; Lay and Nolte 2018) . These studies have confirmed many of the drivers of LSLAs; however, they have omitted studying two important potential determinants of LSLAs: (1) bilateral investment treaties (BITs) and (2) recipient-country environmental Sebastian Anti is a professor at Bryn Mawr College, Bryn Mawr, PA, USA; his email is [santi@brynmawr.edu. The](santi@brynmawr.edu. The) author thanks Pamela Smith for her support and helpful advice and two anonymous reviewers for their constructive feedback. A supplementary online appendix is available with this article at the World Bank Economic Review website. 1 This paper uses “global South” or just the “South”to refer to the region of the world comprising low-and middle-income countries in Africa, Latin America, Asia, and eastern Europe. © The Author(s) 2022 . Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / THE WORLD BANK. All rights reserved. For permissions, please e-mail: [journals.permissions@oup.com](journals.permissions@oup.com) Downloaded from [https://academic.oup.com/wber/article/36/3/559/6576211 by Sectoral Library Rm MC-C3-220 user on](https://academic.oup.com/wber/article/36/3/559/6576211 by Sectoral Library Rm MC-C3-220 user on) 10 December 2023 560 Anti protection policies. BITs emerged between countries in the 1960s as a solution to the dynamic inconsistency problem theorized by economists to affect low-and middle-income countries’ ability to attract foreign investment. The dynamic inconsistency problem is that low-and middle-income countries have an incentive to ensure equitable treatment to foreign investors to bring

FAQs

What is the main focus of the study on global land rush investments?

The study analyzes whether multinational firms respond to bilateral investment treaties, how BITs interact with recipient-country institutions, and how environmental regulations affect large-scale land acquisitions.

What data and empirical approach does the article use?

It uses data on LSLAs, BITs, and environmental policies from 2002 to 2012, applying a gravity framework with country-pair and time fixed effects.

What key findings connect BITs and environmental policy to land deals?

BITs are associated with a 96–149% increase in land deals, while higher environmental protection indices correspond to about a 36% decrease in the total land investors lease or purchase.

Jul 19, 2026

Uploaded by Ivy