International Initiatives To Eliminate Corruption: Has Bribery Declined?

Bribery discriminates against honest companies by creating a barrier to entry in the form of a competitive disadvantage. An important legal issue with significant implications is whether recent international anti-corruption laws have leveled the playing field for firms doing business abroad. One of the first laws proscribing illicit payments to foreign public officials is the Foreign Corrupt Practices Act (FCPA), initially enacted by the U.S. Congress in 1977. From its inception, the FCPA has been criticized for placing U.S. firms at a competitive disadvantage based on the fact that few countries outlawed bribery of foreign officials. In the past ten years, several international treaties have been ratified that seek to criminalize bribery and eliminate the tax deductibility of corrupt payments made to foreign public officials. This paper discusses anti-corruption laws and their effectiveness in creating a transparent business environment that discourages bribery.