The Global Collaboration against Transnational Corruption - Motives, Hurdles, and Solutions

Contents

List of Figures

Chapter 1: The Topic, Methodology, and Potential Contribution

1 The Current Topic for Transnational Bribery Regulation Analysis

2 The Formation of the Problem-Solving Paradigm

2.1 Phase 1: Academic Insights to the Wisdom of the FCPA Approach

2.1.1 Ideology-Shaped Perspectives

2.1.2 Two Interpretative Models: The Bribery-Centric Model and the Regulation-Centric Model

The Bribery-Centric Model

The Regulation-Centric Model

2.1.3 Interim Summary: A Common Ground—The Political-Will Assumption

2.2 Phase 2: From Academic Insights to Public Beliefs

2.2.1 Imperfect Explanations

2.2.2 The Public’s Acceptance of “Imperfect Explanations”

The First Determinant: The Explanation Should Reflect Social Values

The Second Determinant: The “Disposition to Act”

2.2.3 Bribery-Centric and Regulation-Centric Explanations: Irreconcilable Models with the Same “Disposition to Act”

2.3 Phase 3: From Public Beliefs to Preconceptions of Convention Enforcement

2.3.1 Two Indicators of Convention Enforcement: Lawmaking and Law Enforcement

Lawmaking: A Remarkable Success

Law Enforcement: An Unquantifiable Indictor

2.3.2 Two Labels for Convention Enforcement: “Effective” and “Ineffective”

The Label of “Effective Enforcement”

The Label of “Ineffective Enforcement”

2.3.3 Preconceptions Accounting for the Popularity of the Label of “Ineffective Enforcement”

2.4 Phase 4: The Formation of the Problem-Solving Paradigm

3 Structural Flaws of the Standard Problem-Solving Paradigm

3.1 Questioning the Formulation of “Ineffective Convention Enforcement”

3.2 Questioning the Ingredients of the Standard Problem-Solving Paradigm

3.2.1 A Skeptical View of Logical Starting Point

3.2.2 A Skeptical View of the Theoretical Resource

3.2.3 A Skeptical View of the Control-Oriented Solutions

4 Virtue and Limits of the Standard Problem-Solving Approach for Analyzing Convention Enforcement

4.1 Strong Interpretative Power in Causally Attributing the “Ineffective Convention Enforcement”

4.1.1 Attributing the Lack of Political Will to Domestic and External Factors

4.1.2 Finding Root Causes: Exploitable but Unmeasurable National Regulatory Efforts

4.2 Weak Prescriptive Power of the Standard Problem-Solving Approach in Current Literature

4.3 The Inherent Limitation of the Problem-Solving Paradigm

4.4 The Demand for a Supplementary Paradigm

5 Framing the Supplementary Paradigm

5.1 The Mission of the Supplementary Paradigm

5.2 Theoretical Source for Framing the Supplementary Paradigm

5.2.1 Public Choice Theory as the Theoretical Source for Both the Problem-Solving Paradigm and the Supplementary Paradigm

5.2.2 Institutionalism that Highlights the Impact of Informal Institutions on Individual Preferences

5.3 A Historically Contextual Approach

5.4 The Relation of the Historically Contextual Approach to the Problem-Solving Paradigm

6 Outline of the Book

References

Chapter 2: The Institutionalization of OECD Anti-bribery Collaboration

1 Introduction

2 The FCPA: An Endogenously Created Institution in the Economic Context of the US

2.1 A Historical Review: The US’ Unilateral Illegalization of Transnational Bribery

2.1.1 The Abolition of Tax Deduction Provisions (the 1950s)

2.1.2 The FCPA Enactment and the Criminalization of Transnational Bribery (the 1970s)

2.1.3 A Consequent Question: The Side-Effect of the FCPA on US Overseas Business (the 1970s)

2.1.4 US Efforts and Failures to Multilateralize the FCPA (the 1970s)

US Efforts

US Failures and the Possible Reasons

2.2 Limits of Standard Accounts of the FCPA

2.3 The FCPA as an Outcome of Coordinating Domestic Demands within the Boundaries of Democratic Values

3 The OECD Anti-bribery Convention: A “US-Induced” Institution

3.1 A Historical Review: The Role of the US in the Formation of the Convention

3.1.1 US Motives to Establish a Convention (Since the 1980s)

3.1.2 US Strategies to Establish a Convention (the 1990s)

The Strategy of Imposing Anti-bribery Terms by Trade Treaties

The Strategy of “Public Diplomacy”

The Strategy of Normative Persuasion Through International Organizations

3.1.3 US Achievements: The OECD Anti-bribery Convention and Other Agreements (the 1990s)

3.2 Limits of Standard Accounts of the Convention

3.3 The Convention as an Outcome of a Chain Reaction Initiated by the US

4 The Post-Convention Era: “OECD-Imposed” Institutions for Non-collaborators

4.1 An Attempt by Existing Collaborators to Expand the Community (Since 1994)

4.2 A Historical Review: OECD Efforts to Expand the Community of Collaborators (Since 1999)

4.2.1 OECD Efforts to Recruit New Members into the Convention

4.2.2 OECD Efforts to Collaborate with Non-member Countries

4.3 The Expansion of the Collaboration: Anti-bribery Institutions Imposed on Non-collaborators by Current Collaborators

5 Institutionalizing the Collaboration: An Evolutionary Event Defined by Path Dependence

5.1 The Relevance of Path Dependence to the Whole Story

5.2 Key Operative Factors of the Establishment of Central Institutions of the Collaboration

5.2.1 An Initiator of the Discussion

5.2.2 The Divergence of Interest Demands and the Coordination Function of Countries

5.2.3 The Normative Function of Law that Delimits the Moral Boundaries of the Institutions

References

Chapter 3: A Causal Attribution Model for General Compliance with the Convention

1 Introduction

2 Destabilizing Factors Indigenous to the Collaboration that Encourage Defection

2.1 A Predefined Behavioral Logic of Signatories

2.2 Destabilizing Factors in the Collaboration that Encourage Defection

2.2.1 Factors that Lead to Unsatisfactory Cost-Benefit Calculation

Poor Expected Benefits but High Costs

A Large Group of Outsiders that Exist as “Legal Defectors”

2.2.2 Factors that Create Uncertainty

2.2.3 Interim Summary: A Collective Action Not Self-Sufficient to Survive

3 The Current Institutional Design Fails to Prevent Defection

3.1 The Importance of a Coordinating Mechanism

3.2 Two General Causal Attributions: The Absence of Credible Sanction and the Absence of Effective Monitoring

3.3 The Underperformance of the OECD Monitoring System

4 A Non-routine Problem that Defies Routine Solution

4.1 Unquantifiable Individual Efforts in OECD Anti-bribery Collaboration

4.2 A Non-routine Problem that Fails Central Monitoring

4.3 A Non-routine Problem that Demands an Innovative Solution

5 Beyond Explaining the Problem of “Ineffective Enforcement”

5.1 A Few Signatories’ “Zealous Enforcement” of the Convention Is Not Explained

5.2 The Problem-Solving Paradigm Cannot Explain This Developmental Reality

5.3 A Historically Contextual Approach to Analyze the Case of the US’ FCPA Enforcement

5.3.1 A Historically Contextual Approach

5.3.2 A Case Study of the US’ Increasingly Aggressive Enforcement of the FCPA

5.3.3 Expected Finding

References

Chapter 4: A Solution Model for the Problem of “Ineffective Enforcement”

1 Introduction

1.1 Collective Action and Collective Action Problems

1.2 The Utility of a Monitoring System for Solving Collective Action Problems

1.3 The “Underperformance” of the OECD Monitoring System

1.4 An Unexplained Question: Institutional Flaws Accounting for the Monitoring Problem

2 Structural Flaws of the OECD Monitoring System

2.1 The Organizational Structure of the OECD Monitoring System

2.1.1 The OECD Monitoring System: Three Phases of Peer Review

2.1.2 The OECD Monitoring System: A Centralized Structure

2.2 Information Flow in the OECD Monitoring System

2.3 Inaccurate, Second-Hand Information that Cannot Maintain “Effective Control” Among Signatories

3 Toward High-Level Information Inflow: Private Sector as Information Sources

3.1 The Advantage of Private Sector Actors as Information Source

3.2 The Legitimacy of Private Sector Actors as Information Source

3.3 Existing Laws on Rights of Private Sector Actors

4 Toward High-Level Information Processing: The Dominant Role of National Prosecutors

4.1 The Limited Role of Private Sector Actors in Transnational Bribery Regulation

4.2 Incorporating the Private Sector and the Public Sector into a Holistic Solution Model: The US Model of Qui Tam Action and the Whistleblower Program

5 Toward Effective Mutual Monitoring: Participation Rights of National Regulators in the Home Countries of Victimized Competitors

5.1 Can the US Model Be Marketed to Other Signatories?

5.2 Taking the Role of National Regulators in the Home Countries of Victimized Competitors into the Solution Model

5.3 Outlining a New Type of Monitoring System

6 Conclusion

References

Chapter 5: Inspirations from the US’ Increasingly Aggressive Enforcement

1 Introduction

2 The SEC’s Increasingly Aggressive Enforcement of the FCPA

2.1 The SEC’s “Quiet Years” in FCPA Enforcement in the First Two Decades

2.1.1 Enforcing the Anti-bribery Prong of the FCPA: A Duty “Uncorrelated” to the SEC’s Mission

The SEC’s Central Mission

The SEC’s Statutory Duty of Enforcing the FCPA

The SEC’s Resistance to the Statutory Duty

2.1.2 A Sharp Contrast: Zealously Enforcing the Accounting Provisions but Overlooking the Anti-bribery Provisions

The SEC’s Zealous Enforcement of the Accounting Provisions

The SEC’s Neglect of the Anti-bribery Provisions

2.1.3 Implications of the SEC’s Performance in the First Two Decades

2.2 The SEC’s Increasingly Aggressive Enforcement of the Anti-bribery Prong in Recent Two Decades

2.2.1 The SEC’s Regulation: From for Remedial Purposes to for Punitive Purposes

2.2.2 The SEC’s “Right-to-Know” Corporate Misconducts

2.2.3 Further Expansion of the SEC’s Supervision over Auditors

2.2.4 The Whistleblower Program

2.3 A Bridged Gap Between Enforcing the Accounting Provisions and the Anti-bribery Provisions of the FCPA

3 The DOJ’s Increasingly Aggressive Enforcement of the FCPA

3.1 The DOJ’s “Passive Enforcement” in the First Two Decades

3.1.1 The Tension Between FCPA Enforcement and the DOJ’s Central Mission

3.1.2 The DOJ’s Conservative Strategy

3.1.3 The Limited Effect of the Conservative Strategy

3.2 The DOJ’s “Active Enforcement” in Recent Two Decades

3.2.1 Private Enforcement of Public Law: Private Sector Actors as Whistleblowers

The Enactment of the False Claims Act and qui tam Actions

The Whistleblower Program

3.2.2 The Expansion of the Jurisdiction of the FCPA to Foreigners

3.2.3 The Application of Diversion Agreements: An Effective Tool to Save Social Costs?

3.2.4 The Big-Dollar FCPA Settlements as an Incentive

3.3 Efforts of the DOJ to Reconcile FCPA Enforcement and US National Interests

4 Increasingly Aggressive Enforcement: An Unavoidable Result of Independent Performance of Duties of Domestic Agencies

4.1 The Increasing Demand for Transparent Corporate Management Caused a “Black Hole Effect” Altering the Institutional Context for FCPA Enforcement

4.2 Performance of the SEC and the DOJ that Fails Rational-Choice Interpretations

4.3 The “Catfish Effect” of the US’ FCPA Enforcement on Other Regulatory States

5 Conclusion

References

Chapter 6: Conclusion

1 Methodology: The Problem-Solving Paradigm and a Historically Contextual Approach

1.1 The Problem-Solving Paradigm in Current Literature

1.2 The Ideological Roots of the Problem-Solving Paradigm

1.3 Strength and Limitation of the Problem-Solving Paradigm

1.4 A Historically Contextual Approach as a Supplementary Methodology

2 The Dynamic of the Formation of OECD Anti-bribery Collaboration

3 The Dynamic of State Compliance with the Convention

4 A Solution Model for the Problem of “Ineffective-Enforcement”

5 Inspirations from the US’ Increasingly Aggressive Enforcement of the FCPA

6 Future Research Directions: The Contributions and Limitations of Historically Contextual Analysis

Index