The OECD Anti-Bribery Convention: Changing the Currents of Trade

46 Pages Posted: 5 Apr 2010 Last revised: 4 Feb 2011

See all articles by Anna D'Souza

Anna D'Souza

School of Public Affairs, Baruch College, CUNY

Date Written: December 1, 2009

Abstract

This paper examines the effects of a watershed anti-corruption initiative – the 1997 OECD Anti-Bribery Convention – on international trade flows. I exploit variation in the timing of implementation by exporters and in the level of corruption of importers to quantify the Convention’s effects on bilateral exports. Using a large panel of country pairs to control for confounding global and national trends and shocks, I find that, on average, the Convention caused a reduction in exports from signatory countries to high corruption importers relative to low corruption importers. This suggests that by creating large penalties for foreign bribery, the Convention indirectly increased transaction costs between signatory countries and high corruption importers. I also find evidence that the Convention’s effects differed across product categories. *** A revised version of this article was accepted for publication in the Journal of Development Economics in December 2010, available online***

Keywords: gravity model, international trade, corruption, OECD Anti-Bribery Convention

JEL Classification: F1, F23, F53, K42

Suggested Citation

D'Souza, Anna E., The OECD Anti-Bribery Convention: Changing the Currents of Trade (December 1, 2009). Available at SSRN: https://ssrn.com/abstract=1581429 or http://dx.doi.org/10.2139/ssrn.1581429

Anna E. D'Souza (Contact Author)

School of Public Affairs, Baruch College, CUNY ( email )

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