An analytical study of the Foreign Corrupt Practices Act

This dissertation focuses on the Foreign Corrupt Practices Act (FCPA) of 1977. It examines the legislative process that created the Act, its provisions, its impact on American corporations, and its role in influencing the international community to control the behavior of transnational corporations abroad. It also presents macro level facts and evidence from two cases, Zaire and Kenya, on the consequences of the non-enforcement of such Acts and uncontrolled corrupt practices on developing countries. This study spans from 1977 to 1998.;The legislative configuration model, the legislative role orientation model and the systems model, were the paradigms that were employed to help examine the legislative process, the impact of the law and activities of other international legislation.;Data were collected from congressional reports, House and Senate hearings, weekly compilations of presidential documents, peer review journals (such as Journal of World Trade, Foreign Affairs and International Business, Law Journals, among many others), newspapers (The New York Times and The Wall Street Journal) and statutes.;This study shows the interrelationship between domestic policy and foreign policy. The main finding of this study is that the FCPA had minimal adverse effect on the internal control systems, the export market process, exports, and internal lines of communication of American corporations. The study also highlights the finding that an international agreement to fight corruption is a logical extension of the FCPA---it will level the playing field. Hence, the contribution of the Organization Economic Cooperation and Development (OECD), the Organization of American States (OAS), the World Bank, the International Monetary Fund (IMF), the United Nations and Private Non-Governmental Organizations. These contributions would not have yielded any dividend if not for the direct or indirect pressure the U.S. government brought to bear on these organizations. It is significant to note that Congress spearheaded the passage of the FCPA because the Watergate investigation had weakened the presidency and had shaken the confidence of Americans in governmental agencies. The Foreign Corrupt Practices Act is a classical illustration of government intervention in corporate decision-making process (corporate governance).;In essence, the FCPA was a consequence of cooperation among the actors within the legislative process. The FCPA regulated the behavior of American transnational corporations. The Act contained the anti-bribery and accounting provision. Empirical evidence suggests that the FCPA to a great extent had minimal adverse effects on American business. Indeed, the law has proven to be a success in the long run because the international community has joined America in fighting against corruption in the international business arena.