ABSTRACT
The number, variety, and importance of countries experiencing corruption scandals highlight both the complexity of this phenomenon and its prominence as a global issue. The most serious consequences of corruption are those that afflict the countries where the corruption occurs. With increasing international economic integration, however, distortions to trade and investment flows have attracted growing attention. The United States has had a particular interest in the impact of bribery on international transactions because of the belief that the Foreign Corrupt Practices Act presents a significant competitive disadvantage for US firms competing with multinational firms from countries that do not penalize and may even implicitly encourage the use of bribes to win contracts overseas. Following the corruption scandals of the 1970s involving illicit payments by US multinational corporations to both US and foreign politicians, there was some international discussion of bribery in the context of codes of conduct for multinational investors.
