A Call for a Novel Global Anti-Corruption Framework

Feb. 4, 2014 – Meng Lu

Globally, there are three different levels of anti-corruption enforcement effort. First, domestic political and legal efforts.[1] Second, foreign bribery laws in developed countries with extraterritorial effect.[2] Third, international anti-corruption efforts through international organizations. On the global level, there are the consensus building approach of the United Nations Convention against Corruption (UNCAC) and the sanction-based approach of the World Bank Group.[3] On the regional level, treaties such as the OCED Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of 1997 have been influential in shaping members behaviors.[4] Anti-corruption efforts of the international community are aimed at creating a truly level playing field in the increasingly global business environment. However, current anti-corruption enforcements are either limited in efficacy or limited in reach and scope.

Most conventions and national laws on corruption focus on prevention and punishment through criminal law.[5] This post seeks to solicit new enforcement frameworks to increase the coverage of effective anti-corruption efforts without watering down the efficacy. Punishment based anti-corruption laws is grounded in the basic theory of liability.  A risk neutral party will commit a harmful act if and only if the expected benefit exceeds private cost.[6] Private choice is suboptimal when social costs are not taken into account by private parties engaged in harmful behavior. Laws impose liability to make parties internalize this social cost. Thus, for a risk-neutral party, fault-based liability induces optimum behavior if expected sanction equals expected social harm.

A party’s decision to engage in corruption is a function of (1) probability of sanction, (2) level of sanction, and (3) benefits from corruption. Effective deterrence through the sanction system should focus on all three variables. Anti-corruption laws tend to focus on the probability and level of sanction, whereas methods to reduce the gains from corruption should also be pursued. For instance, the 2000 World Bank report prescribed that an effective anti-corruption strategy should encourage the reduction of rents by means of economic liberalization, deregulation, tax simplification, de-monopolization and  reduce discretion through administrative and civil service reform, including meritocratic recruitment and decentralization. This  multidimensional approach is common within public policy realm but often ignored in anti-corruption law. This post is a call for innovative ideas to incorporate all three elements in a novel, effective, and global anti-corruption framework.


[1] See e.g., The Anti-Graft and Corrupt Practices Act of 1960 and the Anti-Money Laundering Act of 2001, which addresses corruption, including attempted corruption, bribery, extortion, using confidential state information for private gain, money laundering, and organized crime in the Philippines.

[2] See e.g., FCPA and UK Bribery Act.

[3] See e.g., the United Nations Convention against Corruption.

[4] See e.g., the UK Bribery Act.

[5] Xandra E. Kramer, Private International Law Responses to Corruption,  ‘International Law and the Fight against Corruption’, Mededelingen van de Koninklijke Nederlandse Vereniging voor Internationaal Recht, Preadviezen, 139 (Advisory Report for the Dutch Royal Society of International Law), Asser Press, 2012, p. 99-142.

[6] Since corruption laws deals mainly with corporations, it is reasonable to assume risk neutrality.

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