The International Business Community and Evolving Norms regarding Foreign Bribery
Reed, Melanie.
2017
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Abstract: The private sector has an important role to play in helping to shape
and disseminate international norms that form the basis of international regimes. For
example, in an effort to protect its business interests by creating an even playing field,
the private sector played a key role in moving discourse on foreign bribery from the US
domestic to the international level, which resulted ... read morein the OECD Convention on Combating
Bribery of Foreign Public Officials in International Business Transactions of 1997 and
other international instruments. Given that the ultimate target of this anti-foreign
bribery regime is bribe-paying by the private sector, continued private sector support of
the regime is a critical factor in whether it has real staying power. This study explores
why private sector companies choose to engage in the anti-foreign bribery regime. Private
firms seek to maximize value and minimize costs (both financial and reputational). However,
their analysis of costs and benefits is not a static, one-time occurrence, but rather
depends on their position in relation to government enforcement authorities and other firms
over time. Thus, engagement in the regime is a sequential process that occurs in three
stages. At the first two stages, large firms make rational decisions to engage because of
enforcement pressures they feel, either from US or home country enforcement authorities.
Smaller firms, however, do not face these enforcement pressures, so initially have no
reason for engaging in the regime. They will only engage once the larger firms with which
they do business undertake anti-corruption measures and push those standards of conduct to
their suppliers and business partners. Interviews with Norwegian and Italian firms confirm
that this model works as expected, even in countries with differing levels of perceived
corruption, adherence to the rule of law, and generalized trust. However, home country
context has an important role in how firms perceive enforcement risks as well as how they
actually engage in the regime. Norwegian firms were more likely to discuss enforcement in
terms of the risk of reputational damages, while Italian firms were more likely to
reference the risk of enforcement itself. This finding has important implications for
policymakers developing incentives for firms to comply with foreign bribery laws.
Furthermore, although firms from both countries adopted anti-corruption compliance programs
and required their business partners to do the same, Norwegian firms were more likely to
attempt to directly change corruption environments in foreign countries, while Italian
firms were more likely to take defensive measures to protect against bribery by including
controls in their business transactions. This suggests that Norwegian firms will be more
successful at direct normative change, while Italian firms will be more successful at
changing practical modes of conducting business.
Thesis (Ph.D.)--Tufts University, 2017.
Submitted to the Dept. of Diplomacy, History, and Politics.
Advisor: Daniel Drezner.
Committee: Nancy Hite-Rubin, Jette Knudsen, and Alvaro Cuervo-Cazurra.
Keywords: International relations, Business administration, and International law.read less - ID:
- 4f16cd90h
- Component ID:
- tufts:22760
- To Cite:
- TARC Citation Guide EndNote
