COMBATING CORRUPTION

Description

Introduction

This chapter studies efforts by governments to combat corruption between the Cold War and the 2010s. We show how Western powers shifted their stance toward corrupt activities of “their” multinational corporations (MNCs) abroad from turning a blind eye during the Cold War to gradually developing collective efforts to fight against corruption. The efforts to punish MNCs engaging in bribery abroad started in the United States of America with the adoption of the Foreign Corrupt Practices Act of 1977. For almost two decades, the United States was alone in this effort and the other Western powers did very little to fight against their MNCs’ corrupt activities abroad. In the 1990s, however, other Western powers (mainly members of the Organ- isation for Economic Co-operation and Development [OECD]) joined the United States in developing a common front and practices to deal with this problem. We argue that efforts to fight corruption of domestic firms operating abroad are closely related to (a) big scandals that created social pressures for the government to fight against corruption; (b) external and political shocks that brought up to the surface existing corruption previously overlooked or ignored; and (c) pressures from the private sector to make the field of global business more competitive. Our chapter uses secondary sources in addition to the Public Papers of the Presidents of the United States for the Jimmy Carter administration, the United States Senate Church Committee Hear- ings on corruption, the United States General Accountability Office reports on global corrup- tion, and reports on corruption published by the OECD.