«The Good Bribe Philip M. Nichols* Bribery is justifiably condemned, and is the object of a global legal campaign. This article asks whether payment ...»
75 See, e.g., Richard J. Lazarus, Mens Rea in Environmental Criminal Law: Reading Supreme Court Tea Leaves, 7 FORDHAM ENVTL. L.J. 861, 866-67 (1996) (discussing the deterrent effect of criminal environmental laws to protect the environment); Karen N.
Scott, International Law in the Anthropocene: Responding to the Geoengineering Challenge, 34 MICH. J. INT’L L. 309, 333 (2013) (“International environmental law is arguably founded on the obligation to ensure that activities within the jurisdiction or under the control of a state do not cause harm to the environment of other states or to areas beyond national jurisdiction.”).
76 See, e.g., Brad Estes, Note, Prosecuting Over Peanuts: How the PCA Scandal Can Inform More Effective Federal Criminal Enforcement of Food Safety Laws, 33 REV. LITIG.
145, 166 (2014) (noting that deterrence is a critical function of food and drug safety laws because of the possibility of serious harm).
77 See generally Grant Walton & Stephen Howes, Using the C-Word: Australian Anti-Corruption Policy in Papua New Guinea, DEVPOLICY BLOG (Aug. 22, 2014), http://devpolicy.org/using-the-c-word-australian-anti-corruption-policy-in-papuanew-guinea-20140822/ (“Corruption was a word not muttered in polite company, not in front of one’s friends (strategic allies) anyway.”).
78 James D. Wolfensohn, Address to the Board of Governors at the Annual Meetings of the World Bank and the International Monetary Fund (Oct. 1, 1996), in
VOICE FOR THE WORLD’S POOR: SELECTED SPEECHES AND WRITINGS OF WORLD BANKPRESIDENT JAMES D. WOLFENSOHN, 1995-2005, at 45, 50 (2005).
79 Ibrahim F.I. Shihata, Corruption – A General Review With an Emphasis on the Role of the World Bank, 15 DICK. J. INT’L L. 451, 475 (1997).
University of California, Davis 662 [Vol. 49:647 Ackerman herself tied corruption control to the law: “A basic condition for corruption control is a viable legal framework that enforces the law without political favoritism or arbitrariness.”80 The Bank’s rules mandated that it concern itself “only with the economic causes and effects and should refrain from intervening in the country’s political affairs.”81 In other words, the Bank was required to focus on harm rather than on the connection between a people and their government.
The mid-1990s also saw the release of two numerical treatments of corruption: Transparency International’s much-heralded Corruption Perceptions Index and the World Bank’s less-acclaimed but more detailed Worldwide Governance Indicators.82 Quantitative scholars now had data, and research on the effects of bribery and other forms of corruption exploded.83 In combination, these events ushered in a new era of legal scholarship and legal regimes which focused on the consequences of corruption and in particular corruption’s effect on development.84 80 Susan Rose-Ackerman, The Role of the World Bank in Controlling Corruption, 29 LAW & POL’Y INT’L BUS. 93, 106 (1997).
81 Shihata, supra note 79, at 477.
82 See, e.g., Amichai Magen, The Rule of Law and Its Promotion Abroad: Three Problems of Scope, 45 STAN. J. INT’L L. 51, 112 (2009) (describing the importance of the release of the Worldwide Governance Indicators in 1996); Elizabeth K. Spahn, Implementing Global Anti-Bribery Norms: From the Foreign Corrupt Practices Act to the OECD Anti-Bribery Convention to the U.N. Convention Against Corruption, 23 IND. INT’L & COMP. L. REV. 1, 7-8 (2013) (discussing the release of the Corruption Perceptions Index in 1995).
83 See Michael Johnston, Preface to CIVIL SOCIETY AND CORRUPTION: MOBILIZING FOR REFORM, at xi, xvii (Michael Johnston ed., 2005) (“The past decade has produced an explosion of information and data on corruption.... [S]o much material, in fact, that we may well be overwhelmed by the task of finding and sorting out information.”).
84 See, e.g., Padideh Ala’i, The WTO and the Anti-Corruption Movement, 6 LOY. U.
CHI. INT’L L. REV. 259, 272 (2008) (describing emergence of “a transnational anticorruption movement... based on the premise that corruption was a major impediment to the success of market economics”); Nancy Zucker Boswell, An Emerging Consensus on Controlling Corruption, 18 U. PA. J. INT’L ECON. L. 1165, 1173 (1997) (“The heads of the World Bank and IMF have provided significant impetus to the emerging consensus, particularly since the 1996 annual meetings.... This is a remarkable shift from only a few years earlier, when many in these institutions considered the issue too political.”); Hassane Cissé, Crossing Borders in International Development: Some Perspectives on Human Rights, Governance, and Anti-Corruption, 55 VA. J. INT’L L. 1, 3 (2014) (attributing “a significant evolution in the thinking around [governance and anti-corruption]” to “Wolfensohn’s ‘cancer of corruption’ speech”).
The Good Bribe 2015] 663 The harms inflicted by corruption are now known to be multitudinous and pernicious.85 The Foreword to the United Nations
Convention Against Corruption clearly outlines these harms:
Corruption is an insidious plague that has a wide range of corrosive effects on societies. It undermines democracy and the rule of law, leads to violations of human rights, distorts markets, erodes the quality of life and allows organized crime, terrorism and other threats to human security to flourish.86 Bribery changes the bases on which business decisions are made. In a properly functioning market, rational consumers decide which good or service to purchase by considering price and quality.87 In a corrupted system, on the other hand, bribe-taking consumers do not consider the price or quality of goods or services but instead make decisions based on the size and quality of a bribe.88 Bribery also distorts the decision-making process by creating incentives for bribe takers to delay, obfuscate, or hide information.89 Decisions made in this way can lead to the production of lower-quality goods and to the misallocation of resources.90 Corruption inflicts a multitude of harms. Studies associate corruption with depressed economic growth, lower rates of investment, inflation, and currency depreciation.91 Studies find a link 85 See Selçuk Akçay, Corruption and Human Development, 26 CATO J. 29, 29-30 (2006) (summarizing the effects of corruption).
86 Kofi Annan, Foreword to United Nations Convention Against Corruption, U.N.
OFFICE ON DRUGS & CRIME, at iii, U.N. Sales No. V.04-56160 (2004), available at http://www.unodc.org/documents/brussels/UN_Convention_Against_Corruption.pdf.
87 See Mark B. Bader & Bill Shaw, Amendment of the Foreign Corrupt Practices Act, 15 N.Y.U. J. INT’L L. & POL. 627, 627 (1983).
88 See id.
89 See Scheherazade S. Rehman & Frederick V. Perry, Corruption, Constitutions, and Crude in Latin America, 20 LAW & BUS. REV. AM. 163, 164 (2014) (“Corruption is costly; it has been argued that when corruption is allowed to flourish, it is in the interest of government officials to make and increase bureaucratic hurdles and red tape, because this provides for more opportunity to demand bribes.”).
90 See Omar Azfar, Young Lee & Anand Swamy, The Causes and Consequences of Corruption, 573 ANNALS AM. ACAD. POL. & SOC. SCI. 42, 45 (2001) (“[T]he highest bribe may be paid by a low-cost and low-quality producer, not necessarily the one who is most efficient.”); Elizabeth Spahn, Nobody Gets Hurt?, 41 GEO. J. INT’L L. 861, 870 (2010) (“Bribery leads to the misallocation of government funds. Vital projects that are greatly needed and directly benefit citizens are ignored.”).
91 See, e.g., Fahim A. Al-Marhubi, Corruption and Inflation, 66 ECON. LETTERS 199, 199 (2000) (finding “a significant positive association between corruption and inflation”); Mohsen Bahmani-Oskooee & Abm Nasir, Corruption, Law and Order, Bureaucracy, and Real Exchange Rate, 50 ECON. DEV. & CULTURAL CHANGE 1021, 1026 University of California, Davis 664 [Vol. 49:647 between corruption and disproportionate military spending,92 as well as between corruption and the percentage of paved roads in good condition93 and between levels of corruption and the ratio of both public education spending and public health spending to gross domestic product.94 Corruption is also strongly linked to mistrust of government and other institutions.95 Bribery and corruption also inflict harms directly on persons.
Corruption has been found to correlate with child mortality rates, lower child birth weight, and increase the dropout rate of children from primary school.96 Similarly, a strong negative relationship exists between corruption and the performance and viability of healthcare systems.97 Corruption negatively affects environmental policy and the (2002) (finding that countries with “a high degree of corruption or less law and order tend to experience a real depreciation in their currency”); Paolo Mauro, Corruption and Growth, 110 Q.J. ECON. 681, 705 (1995) (“[A] negative association [exists] between corruption and investment, as well as growth, [which] is significant in both a statistical and an economic sense.”); Pak Hung Mo, Corruption and Economic Growth, 29 J. COMP. ECON. 66, 76 (2001) (finding that a one percent increase in the amount of corruption decreases growth in gross domestic product by almost three-quarters of a percent); Shang-Jin Wei, How Taxing Is Corruption on International Investors?, 82 REV.
ECON. & STAT. 1, 8 (2000) (“An increase in the corruption level from the Singapore to the Mexico level would have the same negative effect on inward [foreign direct investment] as raising the tax rate by eighteen percentage points to fifty percentage points, depending on the specifications.”).
92 E.g., Sanjeev Gupta, Luiz de Mello & Raju Sharan, Corruption and Military Spending, 17 EUR. J. POL. ECON. 749, 750-51, 764 (2001).
93 See, e.g., Benjamin A. Olken, Monitoring Corruption: Evidence from a Field Experiment in Indonesia, 115 J. POL. ECON. 200, 221-23 (2007) (finding a relationship between bribery and low quality roads in Indonesia); Vito Tanzi & Hamid Davoodi, Corruption, Public Investment, and Growth 3 (Int’l Monetary Fund, Working Paper No.
139, 1997) (discussing the association of corruption with deteriorating infrastructures).
94 See, e.g., Paolo Mauro, Corruption and the Composition of Government Expenditure, 69 J. PUB. ECON. 263, 272-75 (1998) (analyzing correlation between corruption and government expenditures).
95 See Susan Rose-Ackerman, The Political Economy of Corruption, in CORRUPTION AND THE GLOBAL ECONOMY 31, 45 (Kimberly Ann Elliot ed., 1997); Adam H. Kurland, The Guarantee Clause as a Basis for Federal Prosecutions of State and Local Officials, 62 S. CAL. L. REV. 367, 486 (1989).
96 Sanjeev Gupta, Hamid Davoodi & Erwin Tiongson, Corruption and the Provision of Health Care and Education Services 23-24 (Int’l Monetary Fund, Working Paper No.
116, 2000), available at http://www.imf.org/external/pubs/ft/wp/2000/wp00116.pdf.
See generally Taryn Vian, Corruption and the Health Sector, USAID & MGMT. SYS. INT’L (Nov. 2002), http://pdf.usaid.gov/pdf_docs/pnact877.pdf (discussing the relationship between corruption and poor medical service).
97 See, e.g., Maureen Lewis, Governance and Corruption in Public Health Care Systems 44-45 (Ctr. for Global Dev., Working Paper No. 78, 2006), available at The Good Bribe 2015] 665 quality of the environment.98 A relationship has even been found between corruption and increases in traffic fatalities.99 Awareness of the harms inflicted by corruption contributed to the emergence of a global anticorruption regime.100 As Professor Roger Alford describes, “The race to establish international norms against corruption had begun. In a development worthy of wonder, the result has been a flurry of international treaties against corruption.”101 Those treaties for the most part require signatories to criminalize domestic bribery and, to the extent possible, to criminalize transnational bribery.102 These laws together form what Professor Elizabeth Spahn describes as a dynamic and interactive framework of ubiquitous, overlapping, far reaching rules in which “[e]nforcement competition mixed with enforcement cooperation play the central roles.”103