The Political Economy of the Foreign Corrupt Practices Act: An Exploratory Analysis

31 Pages Posted: 12 Mar 2018 Last revised: 1 Apr 2018

See all articles by Rebecca Perlman

Rebecca Perlman

Stanford University

Alan Sykes

Stanford University - Law School

Date Written: March 8, 2018

Abstract

Critics of the Foreign Corrupt Practices Act (FCPA) have frequently claimed that it puts U.S. firms at a competitive disadvantage. This critique suggests that the beneficiaries of FCPA enforcement are foreign competitors of U.S. firms, and foreign economies that suffer fewer of the inefficiencies associated with corruption. Yet enforcement of the Act has increased dramatically since it first passed in the post-Watergate, anti-corruption era. If the FCPA really promotes foreign interests over the interests of U.S. firms doing business abroad, and if there are no obvious domestic beneficiaries of aggressive enforcement, why have domestic business interests been unable to push back successfully against growing enforcement? This paper suggests several reasons why the adverse effects of FCPA enforcement on U.S. business may be considerably smaller than some FCPA critics suggest, and why significant numbers of U.S. firms may actually benefit from enforcement. Our hypotheses find support in Congressional testimony, business surveys, and interviews with prominent FCPA practitioners and compliance officers.

Keywords: Foreign Corrupt Practices, Corruption, Bribery, International Political Economy

JEL Classification: F10, F23, F50, K22, K33, K42

Suggested Citation

Perlman, Rebecca and Sykes, Alan, The Political Economy of the Foreign Corrupt Practices Act: An Exploratory Analysis (March 8, 2018). The Journal of Legal Analysis, Forthcoming; Stanford Law and Economics Olin Working Paper No. 519. Available at SSRN: https://ssrn.com/abstract=3136696

Rebecca Perlman

Stanford University ( email )

Stanford, CA 94305
United States

Alan Sykes (Contact Author)

Stanford University - Law School ( email )

559 Nathan Abbott Way
Stanford, CA 94305-8610
United States

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