The Domestic and International Enforcement of the OECD Anti-Bribery Convention

Table of ContentsI. Introduction 86II. A New Wave of International Economic Law Obligations 90A. Trade and Investment Treaties 90B. Market-Engaging Agreements 92III. Current Anti-Corruption Measures 94A. Economic Justifications for Anti-Corruption Law 94B. The FCPA and OECD Treaty 97C. Criteria for Evaluating Domestic Enforcement Efforts 101IV. Effects on the Interstate Enforcement of Anti-Corruption Measures........104A. Traditional Means of Interstate Enforcement 104B. Current Assessments of OECD Enforcement 106V. Conclusions 108I. IntroductionIn Economic Foundations of International Law, Eric Posner and Alan Sykes provide an extensive overview of the application of economic reasoning to the development of international law. The book surveys a host of areas from security and the rules of war, to environmental and human rights concerns. One of the areas that the economic approach to legal development has been the most successful is in international economic law. At the outset, the background justification for international cooperation is overwhelmingly economic. Economic theory predicts that freer trade or greater access to capital investment leads to economic growth and greater net national welfare. These welfare effects are the driving motivation for trade or investment treaties.1 Empirical questions about causal relationships between a treaty's terms and the agreement's welfare effects can thus undermine support for the agreement. For example, the growing empirical literature on the relationship between foreign direct investment and economic growth in the host state raises concerns in some quarters about the utility of bilateral investment agreements.2In addition, economic analysis provides expectations about the negotiating process and the effects of specific treaty terms on institutional design elements. With respect to negotiations, economic frameworks tend to focus on the structure of the cooperation problem3: are the benefits of international cooperation excludable? Are the actions of states easily observable? Are states uncertain of the potential distributional effects of the agreement?4 The elements of problem structure can influence who is invited to the negotiating table as well as institutional design choices. For instance, the benefits of trade agreements are more excludable than the benefits of climate change mitigation and thus trade agreements can often take place at the bilateral or regional level while climate negotiations are almost always global. Similarly, economic analysis may also lead us to expect that some substantive obligations are more desirable than others. For instance, the use of a Most Favored Nation (MFN) provision, while not a necessary element of economic liberalization, provides several attractive qualities-such as the extension of liberalizing policies to all regime members and a limit on trade diversion-and is therefore commonly observed in both international trade and international investment agreements.5This short Article seeks to expand upon Posner and Sykes's work by providing a first cut at an economic analysis of a relatively recent but rapidly expanding area of international economic law: anti-corruption treaties. …