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The ostensible lack of effectiveness of the current multilateral initiatives to curb transnational bribery has engendered a lively debate about the relationship between domestic morality, transnational policy, economic efficiency, and the effectiveness of legislation in curtailing transnational bribery. This discussion has taken place under the rubric of the desirability of the extra-territorial prohibition of transnational bribery as an international policy goal. The main condemnation of the current efforts to regulate transnational bribery relates to the prevalence of transnational bribery despite extensive legal devices to control the practice. In these criticisms, domestic regimes seem too weak to pursue adequate regulation of their own while being ensconced in notions of sovereignty and jurisdiction, which hamper efforts to respond adequately to the cross-jurisdictional cooperation requisite to the effective regulation of transnational bribery.

 

There are several dimensions to the debate concerning the appropriate strategy for tackling transnational bribery. The first level of the debate concerns whether transnational bribery should be tackled on the demand or supply side. Elsewhere, I have advocated that a mixed strategy tackling both the demand and supply side would be appropriate. The second and more salient debate to the problem of transnational bribery concerns the appropriate strategy for tackling the supply side of transnational bribery. The question as framed by this debate is whether the supply side of transnational bribery should be tackled through extra-territorial prohibition (for instance, the United States punishing incidents of bribery that occur in Sierra Leone) or through host state regulation alone (the Government of Sierra Leone taking responsibility for cases of bribery that occur in Sierra Leone even if US corporations are involved). Commentators on the supply side of the debate and commentators on the demand side of the debate have argued for and against multilateral efforts to combat the supply side of transnational bribery, but the debate is presently stalemated and inconclusive.

 

The traditional non-consensus on the regulation of transnational bribery

From the perspective of some critics, the current multilateral initiatives are ill conceived and the initiatives are responsible for the failure to curb transnational bribery. Some of the proponents of the current multilateral initiatives, in contrast laud the current multilateral initiatives. They argue essentially that transnational bribery damages the quality of transnational relationships, thus endangering global security and locate the inefficacy of the current multilateral initiatives in the level of enforcement of these initiatives. The relevance of this debate is that in seeking to answer the central question of this debate, both sides have proffered reasons for the failure of the current efforts to curb the prevalence of transnational bribery. Why the current multilateral efforts to regulate transnational bribery have failed to achieve this purpose is a central question with important ramifications for the international regulatory regime. The importance lies in the fact that without an adequate understanding of the reasons for the inefficacy of a particular transnational legal regime, it would be impossible to devise useful international regulatory regimes.

The arguments against the current multilateral initiatives

On an intuitive view, the regulation of transnational bribery would be best served by supply side multilateral efforts to combat transnational bribery using extra-territorial legal prescriptions. Salbu, the main opponent of the current multilateral efforts, makes two related provocative critiques of the current multilateral efforts to curb transnational bribery.[1] He argues that global attitudes about what comprises bribery are so varied that the extra-territorial application of anti-bribery laws creates both moral and political perils. The moral perils concern the danger associated with moral imperialism from the extra-territorial application of domestic laws. In this view, the imposition of laws across borders should be preceded by considerable transnational value consensus. Otherwise, the imposition threatens to deny respect for legitimate regional value variance.[2]

 

In Salbu’s view, cultures should be brought to convergence, if at all, by persuasion, rather than by fiat, and any form of extra-territorial anti-bribery legislation, even the most perfectly conceived, must be considered imprudent under current global conditions. More pertinently, Salbu argues that, while the ideal of a normative village may be enticing, the current condition is one of culturally pluralistic nations. Therefore, the ubiquitous transnational application of any one set of laws is dangerous. The peril of extra-territorial application is the risk of inflicting incongruent or discordant values on others in instances where legitimate, nuanced moral differences are supportable. [3]

 

The main arguments in support of the current multilateral initiatives

Nichols, a proponent of the current multilateral efforts to regulate transnational bribery, describes Salbu’s claim as unsupportable because it grossly misconstrues the nature of prohibitions against transnational bribery.[4] Nichols finds the moral imperialism argument proffered by Salbu troubling, and in particular, a subterfuge for perpetuating entrenched vested interests. He offers two arguments by way of rebuttal of the moral imperialism arguments proffered by Salbu. First, Nichols counters the moral imperialism charge against the extra-territorial prohibitions by observing that if a specific act is legal in the country in which it occurs, it cannot be prosecuted under the current multilateral prohibitions against transnational bribery. Second, given the general condemnation of bribery, respect for cultural differences should not be equated with respect for the corrupt practices of the minority that engages in bribery in a particular society.[5]

 

Setting the arguments against each other

Despite the intuitive appeal of these arguments, Nichols misses the thrust of Salbu’s argument. Whilst most countries prohibit bribery, there is an enormous amount of discretion exercised by a state in the decision to prosecute a particular allegation of bribery. Unfortunately, the extra-territorial prohibition of transnational bribery impinges upon the host state’s discretionary authority to prosecute particular allegations of transnational bribery. Nevertheless, this flaw in the Nichols argument does not imply that the broad proposition put forward by Salbu is correct.

 

Salbu’s second argument, relating to political perils, questions whether the growing consensus on the harmful effects of transnational bribery is enough to justify the adoption of extra-territorial restraints.[6] His concern is that regardless of how many countries eventually join in the present multilateral efforts, the attempts of one sovereign to moderate activity within the borders of another will always pose the risk of disagreements, resentment, and conflict. In this view, current multilateral efforts are too seriously flawed to be considered prudent legislation as they not only attempt to criminalise the acts of foreigners in foreign countries, but also attempt to monitor transactions that occur within foreign boundaries, which host countries are likely to want to control themselves.

 

Nichols counters that there is no evidence to suggest that extra-territorial control of transnational bribery leads to global disharmony, or decreases the level of commerce among states.[7] This is because the criminalisation of transnational bribery neither presents a new set of laws nor regulates the conduct of host country governments. Further, the criminalisation of transnational bribery neither dictates the behaviour of foreign government officials nor other foreign entities. The prohibition applies to citizens of states enacting the legislation, an exercise of the nationality principle, well established and uncontroversial under international law.

 

This view is again contested by Salbu who locates potential tension in the fact that signatory countries are outlawing extra-territorial bribes throughout the world, and not just in their own countries.[8] Salbu argues that the rest of the world, on the other hand, have not agreed to the intrusion but is nevertheless subjected to it. Nichols concludes that Salbu’s view has little room for communities not coincident with political borders, and has little consideration for the myriad of threats that are not the product of state interaction.[9] Salbu surmises that global pluralism undermines efforts to successfully regulate transnational bribery and that the current multilateral efforts cannot avoid moral imperialism simply by virtue of their multilateralism.

 

Geographical morality as a source of distrust among nations – a 3rd argument

Ala’i ascribes morality, albeit geographic morality, to the inefficacy of the current multilateral attempts to curb transnational bribery.[10] This notion of geographical morality is defined by Ala’i as the norm by which citizens of developed states are permitted to engage in acts of corruption in developing states without the attachment of moral condemnation. Ala’i attributes the past failures of multilateral or transnational initiatives to curb bribery to the legacy of colonialism and geographical morality, which have sown the seeds of distrust between the North and the South and concludes that the current anti-corruption initiative cannot escape the legacy of geographical morality. The moralists used the principle of geographical morality during the colonial era to justify acts of corruption in the colonies. In the post-colonial era, justification for corruption was based on the revisionist discourse on corruption, which cited development and tolerance for local cultures and values as the basis for continued acts of corruption. The amorality of the revisionist approach to corruption allowed transnational corporations and others to hide behind cultural relativism in order to justify their involvement in corrupt acts, including bribery of public officials in the former colonies.

 

In Ala’i’s view, the recent rejection through multilateral initiatives of cultural relativism has failed to unseat the deep-rooted distrust created and sustained by the historical link between the topic of corruption, including anti-corruption discourse, and the exploitation of developing countries. Ala’i concludes that current multilateral efforts are destined to fail since they perpetuate the legacy of the rule of geographical morality by adhering to its divisive view.

Deconstructing the multiple facets of the complicated discourse

The question for policy makers as framed by the above debate is whether the use of multilateral initiatives to combat transnational bribery is likely to bring about a reduction in the incidents of transnational bribery. Both the proponents and opponents of the current multilateral efforts have opposing views, which share fundamental assumptions about the desirability of curbing transnational bribery. The two views differ only in their assessment of the cause of the inefficacy of the current multilateral regime and therefore in the preferred policy approach to regulating transnational bribery. The position taken by this author is that neither explanatory model by both sides of the debate convincingly demonstrates the reasons for the failure of the current multilateral efforts to regulate transnational bribery.

 

In many respects, the debate is inconclusive. The opponents of the multilateral initiatives tend to overstate the problem: the multilateral initiatives alone cannot be the cause of the inefficacy. Given the increase in the level of cooperation through the various multilateral efforts to curb corruption, the theory of state interaction in the transnational arena has evolved from the model of competition reflected in the approach of the proponents of the multilateral efforts to curb the problem of transnational bribery. The opponents of the multilateral initiatives also tend to overplay their preferred solution of strengthening domestic capacity: Strengthening domestic capacity alone will not increase the efficacy of the regulatory regime.

 

The Critique of current systems is based on an outmoded concept of State interaction

The rationale of the opponents of the current multilateral efforts is based on a model of state interaction that presumes that this interaction is characterised by competition among the various states over regulatory capacity. According to this paradigm, states are engaged in a continual process of competition over the legitimate exercise of regulatory capacity over transnational bribery. The position taken in this paper is not diametrically opposed to this view in that it recognises the significance of the domestic regulatory regime and the predictions regarding the efficacy of the current multilateral efforts, in line with the opponents of the current multilateral efforts, but disagrees with the reasons advanced for the inefficacy of the current multilateral regime. The point of departure for this paper lies in the assertion that the lack effectiveness of the current multilateral framework is caused by the attempts by developed countries to impose their moral values on developing countries through extra-territorial anti-bribery laws.

 

The leap made by the opponents of the current multilateral efforts from highlighting the dangers of moral imperialism, a legitimate concern, to a reinforcement of the state sovereignty paradigm as the flaw in the current multilateral efforts is unjustified. It is one thing to critique the current state of regulation; it is quite another to demonstrate that a different system will prove superior. Salbu attempts to explain why host state regulation would be more effective. First, he identifies the critical question, as to whether host state regulation would be more effective than the current multilateral efforts to regulate transnational bribery, and answers the question in the negative. This analysis misses an important point. First, he misidentifies the critical question, which should not focus on whether the host state regulation would be better, but whether the multilateral efforts would be worse than host state regulation. His analysis completely ignores the significant and analytically crucial possibility that host state regulation and multilateral efforts may interact and that multilateral efforts may actually strengthen host state regulation.

 

In addition, opponents of multilateral initiatives ignore the norm building functions of transnational prescriptions

 

Second, Salbu’s main critique of the current multilateral efforts can be described as a criticism based on a lack of consensus on the normative foundation for regulating transnational bribery. In this norm driven criticism, Salbu sees a lack of shared ideas on corruption between the developed and the developing countries as the reason for the inefficacy of the multilateral efforts. This view though ignores the focus on the lack of shared ideas and in essence fails to take into account the very important social function played by norms in the process of regulating transnational bribery. In this view, legitimacy and its perception should not be understood as a bar to effectiveness, but rather, legitimacy is a norm or value that influences the compliance and in turn the effectiveness of the transnational legal prescriptions against bribery. Absent the internalisation of these norms, there is very little hope of these norms becoming embedded in domestic legal systems, a process critical to the effectiveness of these transnational prescriptions.

 

Proponents of the multilateral initiatives offer an incomplete blue print

The proponents of the current multilateral initiative on the other hand tend to understate the problem: they advocate a transnational regulatory regime without fully exploring its relational and process characteristics. The proponents also tend to avoid sustained consideration of solutions by failing to spell out the essential characteristics of how the proposed transnational regulatory regime would work in practice. These broad assertions are based on the following premise. To address the shortcomings of the state competition model expounded by the opponents of the multilateral initiatives, the proponents of the current multilateral efforts posit, based on a game theoretical model, that the rational pursuit of self-interest is a key determinant in shaping the enforcement of the current multilateral initiatives. In this view, the State as rational strategic, interdependent, decision-making actors determine the level of compliance in any area of cooperation.[11] These states, as rational actors, choose their level of compliance with the multilateral efforts to curb transnational bribery.

 

Although the game theory approach, advocated by the proponents of the current multilateral efforts, was developed to address the shortcomings of the state competition model, accepting this model would constitute a conceptual step backwards. As a descriptive model, characterising states as rational actors who determine their own levels of compliance and enforcement of transnational bribery prescriptions fails to capture the essence of observable phenomena in the regulation of transnational bribery. For instance, there is no indication that there is any difference between the numbers of bribes paid by either US or Japanese corporations or changes in the levels of bribes paid despite the very different enforcement strategies of these two states. This is because the regulation of transnational bribery presents regulatory challenges that are not purely administrative or cost based.

 

 

Fostering a deeper understanding of interaction between multilateral initiatives and domestic regulation

 

The argument put forward here suggests that the vociferous exchanges over the use of multilateral initiatives in the regulation of transnational bribery have produced a polarized set of alternatives that fail to capture the essence much less the complexity of the problem.

Monitoring compliance is particularly bedevilled with problems associated with information asymmetry. International cooperation in the regulation of transnational bribery by states differs from other more traditional areas of cooperation amongst states an important regard – monitoring the level of commitment by developing countries to enforcing transnational bribery prescriptions. In other more typical areas of cooperation, reciprocal action on the part of some states may induce or sustain compliance by other states with the commitments over time. Although this marked reciprocity might sustain cooperation between developed states in terms of enforcing these transnational prescriptions, the incentives for reciprocity do not extend to the developing countries that are the site of most cases of transnational bribery. This ensures that commitments by developing countries to curb transnational bribery and their violations cannot be effectively deterred by the threat of retributive violation by developed countries.

 

There are also problems associated with cooperation even among the developed states. Some problems requiring international cooperation are more transparent than others and are therefore capable of being monitored, making the monitoring of effectiveness easier. Transnational bribery, however, is not one of those problems. This ensures that one of the central variables to valuable monitoring of the effectiveness of transnational legal prescriptions, reputational concerns, is absent. Another variable in determining the level of effectiveness concerns the relational gains among the various signatories to the transnational prescription. States in which the adequate regulation of transnational bribery would require pervasive and costly domestic regulatory activity are less likely to be less successful in their efforts to curb transnational bribery.

 

 

Bringing it all together

Above, I have broadly categorized the primary explanations that have been put forward to explain the failure of the current multilateral initiatives to regulate transnational bribery by corporations into two camps. The opponents of the current multilateral initiatives whose principal premise is that the current multilateral initiatives are ineffective because of the risk moral imperialism engendered by the extra-territorial application of domestic laws and the attempt to impose transnational value convergence where none exists. The proponents of the current multilateral initiatives whose main premise is that the current multilateral initiatives are ineffective due to the lack of enforcement of these initiatives. The limitations of the explanatory models of both the proponents and opponents of the multilateral initiatives at a minimum imply that we disentangle the semantics of the debate by critically analysing the underlying causes for the failure of current multilateral efforts to stem the incidents of transnational bribery.

 

Our view rests on a simple premise. The last twenty years have witnessed an intensification of the articulation of a shared vision on the appropriate economic, political and legal strategy for the transnational community in the regulation of transnational corruption. The intensification represents tacit acceptance that given the transnational nature of modern business transactions, stemming corruption cannot be the preserve of domestic legal systems alone. Given that the domestic legal systems that are the site of these corrupt are often experiencing periods of transition, the peculiar cross-jurisdictional problems associated with the regulation of transnational bribery puts an additional strain on the already weak capacity of the domestic legal systems capacity to respond to corruption.

 

The regulation of transnational bribery is largely about domestic regulation and regulatory structures and the differences among states in their understanding of the standards set in the multilateral initiatives. More importantly, even in instances where there is consensus on shared ideas, evidenced by states complying with multilateral legal prescriptions, overt compliance tells us very little about the level to which the norms have been internalised. As I have argued elsewhere, the level of compliance with the multilateral conventions prohibiting bribery tells us very little about the effectiveness of these transnational prescriptions and therefore offers little guidance in terms of the goal of reducing the prevalence of transnational bribery. In this regard, any meaningful effort to curb the prevalence will have to perform a deeper analysis of the causal relationship between the underlying legal system and the level of effectiveness of the bribery conventions.


[1] See Salbu, S. [1999d]: ‘Extraterritorial Restriction of Bribery: A Premature Evocation of the Normative Global Village’. In Vol. 24 Yale Journal of International Law 223, at 226-227.

[2] Id. at 227. Also see Dalton, M [2006]: ‘: Efficiency V. Morality: The Codification of Cultural Norms in the Foreign Corrupt Practices Act’. In Vol. 2 New York University Journal of Law & Business 583, at 606-608, for a discussion of the problems associated with the application of corruption legislation across different cultural norms.

[3] Id. at 231.

[4] See Nichols, P [1999a]: ‘Are Extraterritorial Restrictions on Bribery a Viable and Desirable International Policy Goal Under the Global Conditions of the Late Twentieth Century?’. In Vol. 20 Michigan Journal of International Law 451 at 471.

[5] Id. at 472-473.

[6] Salbu [1999d: 226-227].

[7] Nichols [1999a: 454].

[8] Salbu [1999d: 253].

[9] Nichols [1999a: 457].

[10] See Ala’i, P [2000]: ‘The Legacy of Geographical Morality and Colonialism: A Historical Assessment of the Current Crusade Against Corruption’. In Vol. 33 Vanderbilt Journal of Transnational Law 877, at 881.

[11] See Davis, K [1999]: ‘Self-Interest and Altruism in the Deterrence of Transnational Bribery’. In Olin Working Paper No. 99-22, 1-56 at 48.

 

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