Economic Analysis of OECD Anti-bribery Convention

Hazal Basarik Kasap (University of Hamburg)

Abstract

This paper investigates the impact of the 1997 OECD Anti-Bribery Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (“OECD ABC” or “the Convention”), a landmark international agreement aimed at combating bribery in international business transactions by criminalizing the supply side of corruption. While ratified by most major investor countries, their enforcement efforts remain highly contested. Challenging the prevailing concern that the Convention harms exports to corrupt markets, this paper highlights the critical distinction between ratification and enforcement. It analyzes how active enforcement affects bilateral exports, leveraging a novel dataset and robust empirical methods. As a result, it demonstrates that enforcing the OECD ABC has complex and context-dependent effects on bilateral exports. The findings reveal that enforcement can negatively influence exports, particularly when excluding the US, the most active enforcer. These results suggest that enforcement introduces compliance costs and risk aversion among exporters, outweighing potential trust-building effects in corrupt markets. This study highlights the critical need to balance enforcement efforts with trade considerations

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