Extra-Territorial Law Enforcement as a

Mechanism of Legal Diffusion:

A Reappraisal of the OECD Anti-Bribery
Convention
Elizabeth Acorn & Michael Allen

Annual Meeting of the American Political Science Association

August 2019
The Criminalization of Foreign Bribery
● US adopted Foreign Corrupt Practices Act (“FCPA”) in 1977
● OECD Anti-Bribery Convention signed in 1997
● Expansive reach of FCPA catches many foreign companies and
individuals
Foreign Defendants and the FCPA: An Example

Headquarters of
Prosecution of Azko Nobel
Azko Nobel

Bribery of public
officials
Why Prosecute Foreigners?
Existing Research: A Spillover Hypothesis
● US prosecutions “unsettle weak enforcement equilibrium”
(Kaczmarek & Newman 2011)

● Keep in mind:
○ Persistent enforcement challenges across OECD
○ Long-standing US interest in anti-foreign bribery
A Shifting Context of Foreign FCPA Enforcement
● Evolving international regime

● Decreasing likelihood of spillover

○ Spillover is more likely with early enforcers
○ New cooperative strategy of US enforcement
Research Question

What effect do US prosecutions of foreign defendants have on the

likelihood of foreign bribery prosecutions in the defendant’s home
state?
Revisiting the Spillover Hypothesis

● Replication: two decades after the OECD Convention, does the

spillover hypothesis hold?
○ More observations and more reliable data

● Refining the spillover hypothesis:

○ Does the effect of US FCPA prosecutions of foreign
defendants vary over time?
Data and Methods
Dependent Variable
First Anti-Foreign Bribery Enforcement Action

Independent Variable
US FCPA Enforcement Actions Against Foreign Defendants

Controls
Outbound FDI Stock, Total Trade / GDP, GDP, GDP per capita, inflation,
Common law
Results (1) -- Replication

Model 1.1 Model 1.2 Model 1.3 Model 2.1

Logit Logit Logit Cox
1999-2008 1999-2008 1999-2017 1999-2017

US FCPA -0.26 0.46 0.16 .13

(1.01) (.29) (.16) (.14)

IV type Dummy Count Count Count

Testing Proportional Hazards Assumption
⍴

US FCPA -0.26*

Total Trade 0.15

Outbound FDI 0.17

Stock

GDP -0.01

GDP per capita -0.11

CPI -0.43

Common Law -0.06

GLOBAL n.s.
Testing Proportional Hazards Assumption
Results (2) -- Modeling Nonproportional Hazards

Model 2.3
Cox
All Obs

US FCPA 3.26**
(1.44)
US FPCA * log (t) -1.25**
(.58)

IV type Count
Next Steps...
● “Low hanging fruit” of early US FCPA foreign prosecutions

○ Regulatory Capacity?

● Rise of Global Settlements

○ Collect data on rise of global settlements

○ Case study of early and late US FCPA prosecutions

 Thank you!

elizabeth.acorn@yale.edu

moa32@cornell.edu