International Organization

Research Notes

The Long Arm of the Law: Extraterritoriality and the National Implementation of Foreign Bribery Legislation

Sarah C. Kaczmareka1 and Abraham L. Newmana2

a1 U.S. Government Accountability Office, Washington, D.C. E-mail: sck29@georgetown.edu

a2 Edmund A. Walsh School of Foreign Service, Georgetown University, Washington, D.C. E-mail: aln24@georgetown.edu

Abstract

Can the application of domestic law by bureaucracies in powerful states alter policy dynamics globally? Courts and regulatory agencies with jurisdiction over large markets routinely impose national rules to conduct transpiring outside of their physical borders. Such extraterritoriality has expanded to issues ranging from antitrust to the environment. Proponents claim that extraterritorial acts can have far-reaching international consequences, spilling over into the domestic political economy of regulation in target states. Skeptics, however, question the effects of these sanctions against internationally mobile actors. In this study, we offer the first quantitative analysis of extraterritorial intervention for global policy convergence. In particular, we construct an original time-series panel data set to test the association between extraterritorial actions by U.S. prosecutors and the national enforcement of foreign bribery regulations in target countries. Our empirical analysis finds strong statistical evidence linking extraterritoriality to national policy implementation, with jurisdictions that experienced a U.S. intervention being twenty times more likely to enforce their national rules. The findings suggest the important influence that domestic law in powerful states may have for global cooperation in general and sheds light on the key pillars of international anticorruption efforts in particular.

Sarah C. Kaczmarek is an analyst at the U.S. Government Accountability Office, Washington, D.C. E-mail: sck29@georgetown.edu

Abraham L. Newman is Associate Professor at the Edmund A. Walsh School of Foreign Service at Georgetown University, Washington, D.C. E-mail: aln24@georgetown.edu

Footnotes

For useful comments, we would like to thank the editors and two anonymous reviewers as well as David Bach, Marc Bush, Matt Carnes, David Edelstein, Pat Egan, Desha Girod, Michael Huneke, Jonathan Mastrangelo, Kate McNamara, Dan Nexon, Craig Pollack, Tonya Putnam, Liz Stanley, Jennifer Tobin, Erik Voeten, James Vreeland, and the participants of the Georgetown University Political Economy Seminar and the Georgetown University International Theory and Research Seminar. Data used for the study are available at the International Organization data replication Web site. The opinions and views expressed in this article are the authors' alone and are not intended to reflect institutional views of the GAO.