The Politics of Compensation for Expropriation

Date of Award

Spring 5-15-2013

Author's School

Graduate School of Arts and Sciences

Author's Department

Political Science

Degree Name

Doctor of Philosophy (PhD)

Degree Type



A large literature in political science has examined the choices of governments to expropriate or nationalize foreign investment. Leaders, often with short time horizons, may renege on contracts with foreign investors for political gain, but these choices have serious costs. Existing work has examined why governments are willing to pay these costs or how institutional constraints limit the ability of states to renege on these commitments. What is missing in this literature is a recognition that many governments provide at least some amount of compensation to investors after reneging on these commitments. While political scientists have largely ignored this policy choice, scholars of law often see expropriations with adequate compensation as lawful. In my dissertation, I integrate both of these literatures and focus on the incentives of governments to ultimately renege on contracts while often providing partial compensation. My central insight is that governments can manage the costs of expropriations by compensating investors. I build a formal model of government incentives for both expropriation and compensation and use a novel dataset to test the empirical implications of the theoretical model.


English (en)

Chair and Committee

Nathan M Jensen

Committee Members

Nathan M Jensen, Andrew C Sobel, Randall Calvert, John Patty, Bret Gustafson, Sebastian Galiani


Permanent URL: https://doi.org/10.7936/K72805K9

This document is currently not available here.