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Alice Evans @_alice_evans
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One of the most fascinating laws is in the news!!

The UK Bribery Act makes it illegal to bribe a foreign official.

But why on earth would a government ever introduce legislation that disadvantages its own companies, undermining their comparative advantage?

#thread
For a long time, governments were reluctant to impose legislation.

No country wanted to unilaterally criminalise the bribery of foreign officials, as it would undermine their comparative advantage.

But many governments have since imposed strict legislation.
After Watergate, the US Gov initiated investigations into corruption, bribery, both domestic and international. This revealed further scandals.

Cue public outrage.
There was strong political support for legislation.
Business resisted, but had suffered a loss in legitimacy.
Plus, the Government was sympathetic - Jimmy Carter.

So in 1977, the USA introduced the Foreign Corrupt Practices Act,
Making it illegal to bribe a foreign official.
US businesses were not on board. They vociferously opposed this legislation, as it undermined their comparative advantage. Companies from other countries could secure deals through bribery, while they could not.
US businesses thus lobbied to scrap this legislation.
They found a sympathetic ear, deregulating Reagan.
The FCPA was weakened a little..

But by the 1990s, businesses realised the FCPA was here to stay.
So instead of trying to weaken it, they changed tack.

What did they do?
Realising they couldn't weaken the FCPA, US businesses changed tack:
They pushed for a level playing field.
The USA championed the @OECD Anti-Bribery Convention (1997).
And it enforced its own legislation on companies FROM OTHER COUNTRIES.
Discussions, consultations, inclusive negotiations around the OECD Anti-Bribery Convention also shifted #NormPerceptions: people came to realise growing and widespread condemnation of transnational bribery.
Over in the UK, there was a crisis:

You'll recall the Saudi Arms deal, BAE Systems, cover-up, and termination of investigations. HUGE revelations of corruption and cover-up (like Watergate).

Domestic condemnation, and also rebuke from OECD, as the UK slipped down ranking
The UK Bribery Act was opposed by the Confederation of British Industry and Tory opposition, but we had a centre-left government at the time, which saw the bill through.

abdn.ac.uk/law/documents/…
Really similar dynamics to the FCPA, eh?

outrage + sympathetic centre-left government + shift in norm perceptions + international condemnation from OECD

--> UK BRIBERY ACT! (2010)
Then more and more countries legislated!

In France, businesses no longer wanted to be tried in US courts (under FCPA), so actually supported Sapin II (a French law on transnational bribery).
So norm perceptions are changing..

Australia is now considering introducing a law just like the UK's!!
controlrisks.com/our-thinking/i…
Most OECD governments have now criminalised transnational bribery

- which is a HUGE change from 1996 when in France and Germany transnational bribery was TAX DEDUCTIBLE!!
So that's a fun case of how perceived crisis, outrage catalyse legislation, even tho it jeopardises business interests, and then US firms support multilateral action, which shifts norms and interests, catalysing further legislation around the world.

Cue global collective action!
OR SO YOU MIGHT THINK!!

Interesting turnaround... The UK is currently considering weakening its legislation, in the wake of Brexit, to be more business friendly.

tbc..............
More discussion and references in my paper here: researchgate.net/publication/32…

But yes, I think the history of the criminalisation of transnational bribery is literally one of the most fascinating, important stories about tackling global collective action problems.
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