But here’s the thing. The guy doing the attacking (OK, the scholarly analysis) has made a good case for his thesis. He’s Andy Spalding — a well-mannered and generous lawyer on a year-long Fulbright Research Grant in Mumbai, India. We heard from him earlier this week:
Dear FCPA Blog,I am a lawyer from D.C. currently studying the impact of the FCPA on emerging markets. I am working on a law review article that develops some of my thoughts, and I would love to hear your (and your readers’) reaction.My paper picks up an idea that economists have been batting around for about fifteen years — that FCPA enforcement doesn’t just deter bribery, but actually deters investment in countries where bribery is perceived to be more common. I argue that we should therefore understand FCPA enforcement as de facto economic sanctions, and that these sanctions have most often targeted emerging markets. This raises a number of ethical, economic, and foreign policy problems, as I discuss.You might find the chapter on legislative history interesting (as might your readers). There is a lot of material there that, as far as I know, has not been developed in the law review literature and that might be helpful in briefs and such. I invite anyone to use it.Best regards,Andy Spalding
His conclusions: The FCPA scares clean money away from the most corrupt nations, opening the door to investments by “capital-rich countries that are not committed to effectively enforcing anti-bribery measures.” Think China in Africa, Latin America, and Central Asia, for example. So the patterns of FCPA enforcement, he says, amount to undeclared economic sanctions against developing countries, which in turn send them deeper into corruption and poverty. “The FCPA is thus revealed to be a large-scale study in the law of unintended consequences,” he says.
That’s right. The paper is a real mind-bender. Download it from SSRN here and let us know what you think. We’ll be coming back to this topic sometime soon.
By the way, in footnote 199, the author levels a rather serious charge against The FCPA Blog. He calls our posts on respondeat superior “balanced and sophisticated.” We forgive you, Andy.