Outlawing Transnational Bribery through the World Trade Organization

By Nichols, Philip M. | Law and Policy in International Business, Winter 1997 | Go to article overview

Outlawing Transnational Bribery through the World Trade Organization


Nichols, Philip M., Law and Policy in International Business


Every country in the world makes bribery of its own officials illegal.(1) Nonetheless, demands by foreign government officials that bribes be paid are considered by many businesspersons in Europe and the United States to be among the greatest problems afflicting international trade.(2) Controlling the type of bribery that afflicts international commerce -- transnational bribery -- is particularly difficult because only half of the process is illegal; although every country in the world makes bribery of its own officials illegal, only two countries prohibit the payment of transnational bribes.(3)

The propensity to pay officials for preferential treatment is ancient. Around 1500 B.C., Gimil-Ninurta -- a poor citizen of the city of Nippur in Mesopotamia -- tried to enlist the assistance of the Mayor of Nippur by offering him a goat. The Mayor accepted the goat but, rather than providing assistance, ordered that Gimil-Ninurta be beaten. Some time later, Gimil-Ninurta offered the King of Mesopotamia one mina of gold in exchange for the use of the royal chariot for a day. The King gladly accepted, and Gimil-Ninurta, bearing the apparent authority of the royal chariot, returned to Nippur. After being received into the mayoral residence, Gimil-Ninurta fabricated a story that the Mayor had stolen a chest of gold and ordered that the Mayor receive three beatings. The Mayor also paid two mina of gold to Gimil-ninurta in order to avoid further consequences.(4)

Thirty-five hundred years later, Tansu Ciller, the former Prime Minister of Turkey, also faced charges of corruption. Although she was not beaten for her activities, she was forced into a political alliance with a party that she despises and whose plans for Turkey are, in a charitable light, uncertain.(5)

Modern Turkey and ancient Mesopotamia are close only in a geographic sense; culturally and chronologically they are thousands of years apart. Nonetheless, both stories share one insight: the sale of influence can have devastating consequences. If the thousands of other stories of corruption were added to these two, other consequences would become apparent, including the distortions that corruption can introduce to an economy, the stress that corruption can place on a society, and the barriers erected to international trade by demands for or payments of bribes.

The fact that corruption is an ancient malady may lead to the conclusion that it cannot be remedied and must be treated as part of the normal course of business. A new and very potent instrument to deal with issues such as corruption, however, was recently created. That instrument is the World Trade Organization, which replaced the now-defunct quasi-institution that administered the General Agreement on Tariffs and Trade.(6)

The United States has announced that it will ask the infant World Trade Organization to confront the ancient practice of corruption.(7) Several members of the World Trade Organization, however, have expressed their opposition to the Organization taking up this issue.(8) This Article analyzes those objections and finds that they are not persuasive. Before doing so, however, the Article explores the argument for an international regime proscribing transnational bribery. It finds that corruption and transnational bribery are widespread and have potentially devastating effects on the world economy. Corruption and transnational bribery act as barriers to international trade. They greatly distort economies and corrode the social structure in which those economies exist. Corruption undermines the development of emerging economies by stunting economic growth and by stifling support for market and democratic reforms. These harms are so significant that the World Trade Organization cannot ignore them; it must take action.

The World Trade Organization cannot itself outlaw the practice of transnational bribery, as its reach extends only to the conduct of its members, which are countries.

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