Human Rights Signaling and Foreign Direct Investments After Civil Wars

This paper seeks to examine the role of human rights policies in the wake of civil wars and how they serve as a signaling mechanism to Foreign Direct Investors (FDIs) about a country’s internal stability and environment for investments. I argue that signals are particularly salient in the information-poor environment that follows immediately after the civil war and that these signals can provide clues to various actors about regime interests and approaches to post-conflict commitment issues. I argue that countries which maintains a hierarchical relationship with the United States will be more compelled to improve human rights because they are disadvantaged in other FDI signaling aspects. Using observational data of countries that experienced civil wars 1981-2006, I model how human rights change following the conclusion of civil wars and in the presence of US hierarchical relations, and whether a change in human rights has an effect on post-conflict FDI.