Consistency and legal innovation in the BIT universe

International investment law is marked by the proliferation of bilateral investment agreements(BITs). Close to 3000 BITs have been concluded by 2014 and virtually every country is a signatory. In this paper we construct a novel data set of 1623 BIT texts and compute q-gram string distances between treaty pairs to analyze similarity and dissimilarity in the BIT universe. First,we identify patterns of legal coherence(close mutual distances) and find strong support for the hypothesis that Western capital exporting countries are rule-setters in the treaty-making process. Second, we examine causes of legal innovation (change of treaty distance over time for treaty-making countries) and show that being hit by an…