62 Fla. L. Rev. 351 (2010) |   |   |   |

ABSTRACT :: Although the purpose of international anti-bribery legislation, particularly the U.S. Foreign Corrupt Practices Act (FCPA), is to deter bribery, empirical evidence demonstrates a problematic collateral effect. In countries where bribery is perceived to be relatively common, the present enforcement regime goes beyond the deterrence of bribery, and ultimately deters investment. Drawing on literature from political science and economics, this Article argues that anti-bribery legislation, as presently enforced, functions as de facto economic sanctions. A detailed analysis of the history of FCPA enforcement shows that these sanctions most often occur in emerging markets, where historic opportunities for economic and social development otherwise exist and where public policy should encourage investment. This effect is contrary to the FCPA’s purpose which, as the legislative history shows, is to build economic and political alliances by promoting ethical overseas investment.

These perverse and unanticipated consequences create two policy problems. First, the sanctions literature suggests that capital-rich countries that are not committed to effectively enforcing anti-bribery measures may fill the resulting foreign direct investment void. This dynamic creates myriad ethical, economic, and foreign policy problems, as observed, for example, in China’s aggressive investment in Africa, Latin America, and Central Asia. Second, by enforcing these laws without regard to their sanctioning effects, developed nations are unwittingly sacrificing poverty reduction opportunities to combat bribery. This Article concludes with various proposed reforms to the text and enforcement of international anti-bribery legislation that would further the goal of deterring bribery without deterring investment.