Notes from IACA, Part Three (concl.): A facilitation payments question we could not answer
Wednesday, August 5, 2015 at 10:18AM
Andy Spalding in Corruption Perceptions Index, Facilitating Payments, Greece, IACA, International Anti-Corruption Academy, OECD Convention on Combating Bribery of Foreign Public Officials

Put 30 anti-corruption professionals from diverse countries in an academic classroom for three days, and the human mind goes to new places. Here’s a question that arose during my recent stint at the International Anti-Corruption Academy which we asked but could not answer. Can anyone?

We were discussing the OECD facilitating payments provision, such as it is. We noted that the convention does not actually require states to prohibit these payments. As this previous set of posts discussed, the comments to the convention discourage the payments, but that’s it.

Left with the choice, some countries that are parties to the convention have opted to allow payments and others have not. The breakdown is about 30/70: 30% of state parties to the convention allow facilitating payments, 70% prohibit them.

I have long looked at the lists of countries in each category and tried to divine a pattern. I could not.

Here are the countries that allow facilitating payments: Australia, Austria, Canada, Greece, South Korea, New Zealand, Slovak Republic, South Africa, Spain, Switzerland, and the U.S.

Here are the countries that prohibit facilitating payments: Argentina, Belgium, Brazil, Bulgaria, Chile, Czech Republic, Denmark, Estonia, Finland, France, Germany, Hungary, Iceland, Ireland, Israel, Italy, Japan, Luxembourg, Mexico, Netherlands, Norway, Poland, Portugal, Russia, Slovenia, Sweden, Turkey, and the U.K.

During my recent stint teaching at the International Anti-Corruption Academy, we decided to calculate the average ranking in the Corruption Perceptions Index for each category. You may be surprised by how it came out.

For the countries that prohibit the payments, the average CPI ranking is 34. For those that allow them, it’s 23. 

Yes, the countries that have chosen to allow facilitating payments are ranked higher than those that prohibit them. Among those that allow facilitating payments, if you remove the one conspicuous outlier -- Greece -- the average becomes 16. Either way, it a curious pattern.

Why would this be? We discussed it for some time and produced all manner of possible explanations, none of which seemed persuasive. But often that’s the mark of a good educational experience: it marks not the end of an existing inquiry, but the start of a new one.

So I now put the question to the FCPA Blog readership: Why would countries that allow facilitating payments be ranked higher on the CPI than those that do not? Ideas?

Comments are especially welcome.


Andy Spalding is a Senior Editor of the FCPA Blog and Assistant Professor at the University of Richmond School of Law.

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