11 The need to fight fraud and corruption globally A tale of five phases of anti-corruption regimes Dr. Sebastian Wolf ICC FraudNet Meeting in Münich Bayerischer Hof, October 2, 2009

22 The need… „The true impact of corruption is now widely acknowledged: corruption distorts markets and competition, breeds cynicism among citizens, undermines the rule of law, damages government legitimacy, and corrodes the integrity of the private sector. It is also a major barrier to international development” (Heineman/Heimann).

33 Phase 1: no international a-c efforts ( – mid 1970ies) Corruption and anti-corruption was seen as a pure national phenomenon Some observers even claimed advantages of corruption: „In terms of economic growth the only thing worse than a society with a rigid, overcentralized, dishonest bureaucracy is one with a rigid, overcentralized, honest bureaucracy“ (Huntington).

44 Phase 1: no international a-c efforts ( – mid 1970ies) But even Huntington realized that „a society in which corruption is already pervasive, however, is unlikely to be improved by more corruption“. Only domestic anti-corruption measures Bribing abroad was sometimes even fostered by governments of many OECD countries

55 Phase 2: unilateral measures (mid 1970ies–mid 1990ies) US enacted the Foreign Corrupt Practices Act after scandals (e.g. Lockheed) Other Western countries did not follow US failed to reach bilateral or international agreements Negative impact of FCPA on US exports uncertain Modest enforcement

66 Phase 3: the corruption eruption (mid 1990ies–2005) New framework conditions Nearly every International Organization enacted provisions against corruption (e.g. OAS, OECD, EU, CoE, AU, UN) Anti-corruption industry emerged (several waves: awareness raising, capacity building, pragmatism)

77 Phase 4: implementation (since late 1990ies) Countries more or less implement international anti- corruption provisions at national level International monitoring bodies and civil society more or less rigorously evaluate national implementation records

88 Phase 5: legitimacy crisis? (since mid 2000s) Limited success of international anti-corruption efforts so far Culturally induced behaviour seems resistant to change Limited input legitimacy World economic crisis

99 Some selected recommended actions… …for business: report and monitor anti-corruption activities, support existing standards and collective action frameworks …for governments: put stronger emphasis on enforcement, use innovative tools …for international a-c regimes: create or strengthen effective review mechanisms, broaden membership, provide technical assistance