Does globalization just create welfare gains, or is it accompanied by lower accountability, reduced welfare provision, labor standards or human rights? We argue that the broad and legally enforceable protection offered to foreign investors by bilateral investment treaties (BITs) worsens the human rights practices of developing countries. In such countries, BITs lock-in initial conditions attractive to investors that tend to be linked to vertical investment flows and investment and trade competition, including tax incentives and low environmental standards or labor rights. BITs also constrain the provision of welfare benefits, basic infrastructure and investment in environmentally friendly technologies. The lock-in and constraining effects of BITs are sources of popular grievance and dissent in states that host foreign investment. BIT protected investor rights, however, limit the ability of governments to back-down vis-a-vis investors, lowering the relative cost of human rights violations. Finally, we argue that democracies have higher accountability and a lower threat perception for dissent, mitigating the negative effect of BITs. Evidence from 113 developing countries from 1981 to 2009 supports our hypotheses.