{"title":"Bribe-Switching","authors":"Jamie Bologna Pavlik, Desiree Desierto","doi":"10.1177/10911421241248719","DOIUrl":null,"url":null,"abstract":"The US Foreign Corrupt Practices Act (FCPA) prohibits the payment of bribes to foreign public officials. We uncover an unintended consequence—the shadow economies of the countries of these officials increase after FCPA enforcement. Our hypothesis is that corrupt officials may be switching to taking bribes from illegal markets. We find that one case of FCPA enforcement alone increases the shadow economy by as much as 0.27 percentage points (pp), tree loss—an indicator of illegal logging—by 0.027 pp, and trade misinvoicing by 0.5 pp. Our results suggest the need to harmonize anti-corruption policies across all sectors—legal and illegal.","PeriodicalId":46919,"journal":{"name":"PUBLIC FINANCE REVIEW","volume":"157 1","pages":""},"PeriodicalIF":0.5000,"publicationDate":"2024-04-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"PUBLIC FINANCE REVIEW","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1177/10911421241248719","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q4","JCRName":"ECONOMICS","Score":null,"Total":0}
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Abstract
The US Foreign Corrupt Practices Act (FCPA) prohibits the payment of bribes to foreign public officials. We uncover an unintended consequence—the shadow economies of the countries of these officials increase after FCPA enforcement. Our hypothesis is that corrupt officials may be switching to taking bribes from illegal markets. We find that one case of FCPA enforcement alone increases the shadow economy by as much as 0.27 percentage points (pp), tree loss—an indicator of illegal logging—by 0.027 pp, and trade misinvoicing by 0.5 pp. Our results suggest the need to harmonize anti-corruption policies across all sectors—legal and illegal.
期刊介绍：
Public Finance Review is a professional forum devoted to US policy-oriented economic research and theory, which focuses on a variety of allocation, distribution and stabilization functions within the public-sector economy. Economists, policy makers, political scientists, and researchers all rely on Public Finance Review, to bring them the most up-to-date information on the ever changing US public finance system, and to help them put policies and research into action. Public Finance Review not only presents rigorous empirical and theoretical papers on public economic policies, but also examines and critiques their impact and consequences. The journal analyzes the nature and function of evolving US governmental fiscal policies at the national, state and local levels.
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