Hostname: page-component-cd9895bd7-dzt6s Total loading time: 0 Render date: 2024-12-25T11:36:34.817Z Has data issue: false hasContentIssue false
  • English
  • Français

Nonstate Actors and Compliance with International Agreements: An Empirical Analysis of the OECD Anti-Bribery Convention

Published online by Cambridge University Press:  16 November 2017

Nathan M. Jensen  and
Edmund J. Malesky
Get access

Abstract

International relations scholarship has made great progress on the study of compliance with international agreements. While persuasive, most of this work has focused on states’ de jure compliance decisions, largely excluding the de facto behavior of nonstate actors whose actions the agreement hopes to constrain. Of particular interest has been whether the OECD Anti-Bribery Convention (ABC) might reduce the propensity of multinational corporations (MNCs) to bribe officials in host countries through its mechanisms of extraterritoriality and extensive peer review. Unfortunately, research is hampered by reporting bias. Since the convention raises the probability of investors’ punishment for bribery in their home countries, it reduces both the incentives for bribery and willingness to admit to the activity. This generates uncertainty over which of these incentives drives any correlation between signing the convention and reductions in reported bribery. We address this problem by employing a specialized survey experiment that shields respondents and reduces reporting bias. We find that after the onset of Phase 3 in 2010, when the risk of noncompliance increased for firms subject to the OECD-ABC, those MNCs reduced their actual bribery relative to their nonsignatory competitors.

Type
Research Article
Information
International Organization , Volume 72 , Issue 1 , Winter 2018 , pp. 33 - 69
Copyright
Copyright © The IO Foundation 2017 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Ades, Alberto, and Tella, Rafael Di. 1999. Rents, Competition, and Corruption. American Economic Review 89 (4):982–93.Google Scholar
Ahart, Allison M., and Sackett, Paul R.. 2004. A New Method of Examining Relationships Between Individual Difference Measures and Sensitive Behavior Criteria: Evaluating the Unmatched Count Technique. Organizational Research Methods 7 (1):101–14.Google Scholar
Angrist, Joshua D., and Pischke, Jörn-Steffen. 2008. Mostly Harmless Econometrics: An Empiricist's Companion. Princeton, NJ: Princeton University Press.Google Scholar
Baradaran, Shima, Findley, Michael, Nielson, Daniel, and Sharman, J.C.. 2012. Does International Law Matter? Minnesota Law Review 97 (3):743–837.Google Scholar
Baucus, Melissa S., and Baucus, David A.. 1997. Paying the Piper: An Empirical Examination of Longer-Term Financial Consequences of Illegal Corporate Behavior. Academy of Management Journal 40 (1):129–51.Google Scholar
Blair, Graeme, and Imai, Kosuke. 2012. Statistical Analysis of List Experiments. Political Analysis 20 (1):47–77.Google Scholar
Bliss, Christopher, and Tella, Rafael Di. 1997. Does Competition Kill Corruption? Journal of Political Economy 105 (5):1001–23.Google Scholar
Bray, John. 2005. The Use of Intermediaries and Other Alternatives to Bribery. In The New Institutional Economics of Corruption, edited by Lambsdorff, Johann Graf, Taube, Markus, and Schramm, Matthias, 112–37. New York: Routledge.Google Scholar
Carrubba, Clifford J. 2005. Courts and Compliance in International Regulatory Regimes. Journal of Politics 67 (3):669–89.Google Scholar
Chapman, Terrence, Fang, Songying, Li, Xin, and Stone, Randall W. 2015. Mixed Signals: IMF Lending and Capital Markets. British Journal of Political Science 47 (2):329–49.Google Scholar
Chaudoin, Stephen, and Urpelainen, Johannes. 2015. When Is Good News About Pro-Co-operation Lobbies Good News About Co-operation? British Journal of Political Science 45 (2):411–33.Google Scholar
Chayes, Abram, and Chayes, Antonia Handler. 1993. On Compliance. International Organization 47 (2):175–205.Google Scholar
Checkel, Jeffrey T. 2001. Why Comply? Social Learning and European Identity Change. International Organization 55 (3):553–88.Google Scholar
Coutts, Elisabeth, and Jann, Ben. 2011. Sensitive Questions in Online Surveys: Experimental Results for the Randomized Response Technique (RRT) and the Unmatched Count Technique (UCT). Sociological Methods and Research 40 (1):169–93.Google Scholar
Cuervo-Cazurra, Alvaro. 2008. The Effectiveness of Laws Against Bribery Abroad. Journal of International Business Studies 39 (4):634–51.Google Scholar
D'Souza, Anna. 2012. The OECD Anti-Bribery Convention: Changing the Currents of Trade. Journal of Development Economics 97 (1):73–87.Google Scholar
Dai, Xinyuan. 2005. Why Comply? The Domestic Constituency Mechanism. International Organization 59 (2):363–98.Google Scholar
De Búrca, Gráinne, Keohane, Robert O., and Sabel, Charles. 2014. Global Experimentalist Governance. British Journal of Political Science 44 (3):477–86.Google Scholar
Downs, George W., Rocke, David M., and Barsoom, Peter N.. 1996. Is the Good News About Compliance Good News About Cooperation? International Organization 50 (3):379–406.Google Scholar
Duvanova, Dinissa. 2007. Bureaucratic Corruption and Collective Action: Business Associations in the Postcommunist Transition. Comparative Politics 39 (4):441–61.Google Scholar
Elkins, Zachary, Guzman, Andrew T., and Simmons, Beth A.. 2006. Competing for Capital: The Diffusion of Bilateral Investment Treaties, 1960–2000. International Organization 60 (4):811–46.Google Scholar
Engle, Eric. 2011. I Get by with a Little Help from My Friends? Understanding the UK Anti-Bribery Statute, by Reference to the OECD Convention, and the Foreign Corrupt Practices Act. The International Lawyer 44 (4):1173–88.Google Scholar
Estey, Wade. 1997. The Five Bases of Extraterritorial Jurisdiction and the Failure of the Presumption Against Extraterritoriality. Hastings International and Comparative Law Review 21:177–208.Google Scholar
Fearon, James D. 1997. Signaling Foreign Policy Interests: Tying Hands Versus Sinking Costs. Journal of Conflict Resolution 41 (1):68–90.Google Scholar
Findley, Michael G., Nielson, Daniel L., and Sharman, J.C.. 2014. Global Shell Games: Experiments in Transnational Relations, Crime, and Terrorism. New York: Cambridge University Press.Google Scholar
Fisman, Raymond, and Miguel, Edward. 2007. Corruption, Norms, and Legal Enforcement: Evidence from Diplomatic Parking Tickets. Journal of Political Economy 115 (6):1020–48.Google Scholar
Frey, Bruno S. 1993. Does Monitoring Increase Work Effort? The Rivalry with Trust and Loyalty. Economic Inquiry 31 (4):663–70.Google Scholar
George, Barbara Crutchfield, Lacey, Kathleen A., and Birmele, Jutta. 2000. The 1998 OECD Convention: An Impetus for Worldwide Changes in Attitudes Toward Corruption in Business Transactions. American Business Law Journal 37 (3):485–525.Google Scholar
Habib, Mohsin, and Zurawicki, Leon. 2002. Corruption and Foreign Direct Investment. Journal of International Business Studies 33 (2):291–307.Google Scholar
Hafner-Burton, Emilie M., Mansfield, Edward D., and Pevehouse, Jon C.W.. 2015. Human Rights Institutions, Sovereignty Costs and Democratization. British Journal of Political Science 45 (1):1–27.Google Scholar
Heimann, Fritz F., Dell, Gillian, Földes, Ádám, McCarthy, Kelly, and Reitmaier, Angela. 2014. Exporting Corruption, Progress Report 2013: Assessing Enforcement of the OECD Convention on Combating Foreign Bribery. Berlin: Transparency International.Google Scholar
Hellman, Joel S., Jones, Geraint, and Kaufmann, Daniel. 2000. Are Foreign Investors and Multinationals Engaging in Corrupt Practices in Transition Economies? Transition 11 (3–4):4–7.Google Scholar
Imbens, Guido W., and Wooldridge, Jeffrey M.. 2007. Difference-in-Differences Estimation. Lecture notes 10, What's New in Econometrics? Summer Institute. Cambridge, MA: National Bureau of Economic Research.Google Scholar
Johnston, Alastair Iain. 2001. Treating International Institutions as Social Environments. International Studies Quarterly 45 (4):487–515.Google Scholar
Kaczmarek, Sarah C., and Newman, Abraham L.. 2011. The Long Arm of the Law: Extraterritoriality and the National Implementation of Foreign Bribery Legislation. International Organization 65 (4):745–70.Google Scholar
Kelley, Judith G., and Simmons, Beth A.. 2015. Politics by Number: Indicators as Social Pressure in International Relations. American Journal of Political Science 59 (1):55–70.Google Scholar
Kelley, Judith G., and Simmons, Beth A.. 2016. Introduction: Global Assessment Power in the Twenty-First Century. Paper presented at the 112th Annual Meeting of the American Political Science Association, September, Philadelphia.Google Scholar
Kelley, Judith G. 2017. Scorecard Diplomacy: Grading States to Influence Their Reputation and Behavior. New York: Cambridge University Press.Google Scholar
Keohane, Robert O. 1984. After Hegemony: Cooperation and Discord in the World Political Economy. Princeton, NJ: Princeton University Press.Google Scholar
Knack, Stephen. 2006. Measuring Corruption in Eastern Europe and Central Asia: A Critique of the Cross-Country Indicators. Policy Research Working Paper 3968. Washington, DC: World Bank.CrossRefGoogle Scholar
Koremenos, Barbara. 2013. The Continent of International Law. Journal of Conflict Resolution 57 (4):653–81.Google Scholar
Koremenos, Barbara, Lipson, Charles, and Snidal, Duncan. 2001. The Rational Design of International Institutions. International Organization 55 (4):761–99.Google Scholar
Kraay, Aart, and Murrell, Peter. 2013. Misunderestimating Corruption. Review of Economics and Statistics 98 (3):455–66.Google Scholar
Larson, James R., and Callahan, Christine. 1990. Performance Monitoring: How It Affects Work Productivity. Journal of Applied Psychology 75 (5):530–38.Google Scholar
Li, Chien-Pin. 2006. Taiwan's Participation in Inter-Governmental Organizations: An Overview of Its Initiatives. Asian Survey 46 (4):597–614.Google Scholar
Long, Andrew G., Nordstrom, Timothy, and Baek, Kyeonghi. 2007. Allying for Peace: Treaty Obligations and Conflict Between Allies. Journal of Politics 69 (4):1103–17.Google Scholar
Luo, Yadong. 2006. Political Behavior, Social Responsibility, and Perceived Corruption: A Structuration Perspective. Journal of International Business Studies 37 (6):747–66.Google Scholar
Malesky, Edmund J. 2013. The Vietnam Provincial Competitiveness Index 2012: Measuring Economic Governance for Private Sector Development. USAID/VNCI-VCCI Policy Paper 17. Hanoi, Vietnam: Vietnam Chamber of Commerce and Industry.Google Scholar
Malesky, Edmund J., Gueorguiev, Dimitar D., and Jensen, Nathan M.. 2015. Monopoly Money: Foreign Investment and Bribery in Vietnam, A Survey Experiment. American Journal of Political Science 59 (2):419–39.Google Scholar
Martin, Lisa L. 2000. Democratic Commitments: Legislatures and International Cooperation. Princeton, NJ: Princeton University Press.Google Scholar
Mauro, Paolo. 1995. Corruption and Growth. Quarterly Journal of Economics 110 (3):681–712.Google Scholar
Mosley, Layna. 2010. Labor Rights and Multinational Production. New York: Cambridge University Press.Google Scholar
Nance, Mark T., and Cottrell, M. Patrick. 2014. A Turn Toward Experimentalism? Rethinking Security and Governance in the Twenty-First Century. Review of International Studies 40 (2):277–301.Google Scholar
Nichols, Phillip M. 2013. Are Facilitating Payments Legal? Virginia Journal of International Law 54 (1):127–73Google Scholar
Olken, Benjamin A. 2009. Corruption Perceptions vs. Corruption Reality. Journal of Public Economics 93 (7):950–64.Google Scholar
Organisation for Economic Cooperation and Development (OECD). 2007. Bribery in Public Procurement: Methods, Actors, and Counter Measures. Paris: Organisation for Economic Cooperation and Development.Google Scholar
Organisation for Economic Cooperation and Development (OECD). 2011. OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and Related Documents. Paris: OECD. Available at <http://www.oecd.org/daf/anti-bribery/ConvCombatBribery_ENG.pdf>. Accessed 7 May 2017..+Accessed+7+May+2017.>Google Scholar
Organisation for Economic Cooperation and Development (OECD). 2013. OECD Working Group on Bribery Annual Report 2013. Paris: OECD.Google Scholar
Organisation for Economic Cooperation and Development (OECD). 2014a. OECD Foreign Bribery Report: An Analysis of the Crime of Bribery of Foreign Public Officials. Paris: OECD.Google Scholar
Organisation for Economic Cooperation and Development (OECD). 2014b. Phase 3 Report on Implementing the OECD Anti-Bribery Convention in Turkey. Paris: OECD.Google Scholar
Pacini, Carl, Judyth, A. Swingen, and Rogers, Hudson. 2002. The Role of the OECD and EU Conventions in Combating Bribery of Foreign Public Officials. Journal of Business Ethics 37 (4):385–405.Google Scholar
Rhee, Mooweon, and Valdez, Michael E.. 2009. Contextual Factors Surrounding Reputation Damage with Potential Implications for Reputation Repair. Academy of Management Review 34 (1):146–68.Google Scholar
Sabel, Charles F., and Zeitlin, Jonathan. 2008. Learning from Difference: The New Architecture of Experimentalist Governance in the EU. European Law Journal 14 (3):271–327.Google Scholar
Schmidt, Timothy W. 2009. Sweetening the Deal: Strengthening Transnational Bribery Laws through Standard International Corporate Auditing Guidelines. Minnesota Law Review 93 (3):101–24.Google Scholar
Seligson, Mitchell A. 2006. The Measurement and Impact of Corruption Victimization: Survey Evidence from Latin America. World Development 34 (2):381–404.Google Scholar
Simmons, Beth. 2010. Treaty Compliance and Violation. Annual Review of Political Science 13:273–96.Google Scholar
Slaughter, Anne-Marie. 1995. International Law in a World of Liberal States. European Journal of International Law 6 (1):503–38.Google Scholar
Spencer, Jennifer, and Gomez, Carolina. 2011. MNEs and Corruption: The Impact of National Institutions and Subsidiary Strategy. Strategic Management Journal 32 (3):280–300.Google Scholar
Stephen, Paul B. 2012. Regulatory Competition and Anti-Corruption Law. Virginia Journal of International Law 53 (1):53–74.Google Scholar
Strauss, Emily N. 2013. Easing Out the FCPA Facilitation Payment Exception. Boston University Law Review 93 (1):235–73.Google Scholar
International, Transparency. 2013. Corruption Perceptions Index. New York: Transparency International. Available at <https://www.transparency.org/cpi2013/results>. Accessed 8 May 2017..+Accessed+8+May+2017.>Google Scholar
Tirole, Jean. 1996. A Theory of Collective Reputations (with Applications to the Persistence of Corruption and to Firm Quality). The Review of Economic Studies 63 (1):1–22.Google Scholar
Tomz, Michael. 2007. Reputation and International Cooperation: Sovereign Debt Across Three Centuries. Princeton, NJ: Princeton University Press.Google Scholar
TRACE. 2014. Global Enforcement Report 2013. Annapolis, MD: TRACE International.Google Scholar
Treisman, Daniel. 2007. What Have We Learned About the Causes of Corruption from Ten Years of Cross-National Empirical Research? Annual Review of Political Science 10:211–44.Google Scholar
Tyler, Andrew. 2011. Enforcing Enforcement: Is the OECD Anti-Bribery Convention's Peer Review Effective? George Washington International Law Review 43 (1):137–73.Google Scholar
Viet, Vu Quang. 2010. Abuse of Power in a One-Party Controlled State with Market-Driven Economy: A Case Study of Vietnam. Paper presented at the Conference on Authoritarianism in East Asia, City University of Hong Kong, June.Google Scholar
Bank, World. 2012. World Development Indicators 2012. Washington, DC: World Bank.Google Scholar
Wei, Shang-Jin. 2000. How Taxing Is Corruption on International Investors? Review of Economics and Statistics 82 (1):1–11.Google Scholar
Wellhausen, Rachel L. 2014. The Shield of Nationality: When Governments Break Contracts with Foreign Firms. New York: Cambridge University Press.Google Scholar
Supplementary material: PDF

Jensen and Malesky supplementary material

Jensen and Malesky supplementary material 1

Download Jensen and Malesky supplementary material(PDF)
PDF 611.3 KB
Supplementary material: File

Jensen and Malesky supplementary material

Jensen and Malesky supplementary material 2

Download Jensen and Malesky supplementary material(File)
File 9.9 MB