Lorenzo Crippa

Read @lorenzocrippa.bsky.social, Edmund Malesky, and Lucio Picci on the Trump administration’s weaponization of the Foreign Corrupt Practices Act: https://fam.ag/4aCQXQa

How Washington Is Weaponizing Anticorruption Law The era of neutral enforcement is over.

Our conclusion, from observing all this, is that you don’t need to repeal the FCPA to undermine the anti-corruption regime. You just need to signal that neutral enforcement is over.

Even with an FCPA back on paper, markets are already pricing in that type of world.

END

The risk is that, going on, we will see more bribery, weaker enforcement, and weaker compliance with anti-corruption standards.

All of this risks unraveling a global anti-corruption regime that's been in place for almost three decades.

10/

This has important repercussions beyond the US. Anticorruption enforcement is essentially a collective action problem. Countries restrain their own firms only if others do the same.

Selective U.S. enforcement risks breaking that bargain.

9/

Line chart titled “Weapons of Mass Corruption” showing average change in share prices since February 2025 for firms under FCPA scrutiny. Two lines compare U.S.-based firms (red) and non-U.S. firms (black) from January 2025 to January 2026. After a February 2025 executive order suspending FCPA enforcement, both lines rise. From mid-2025 onward, U.S. firms’ valuations increase steadily, reaching about +16 by January 2026, while non-U.S. firms decline after new FCPA guidelines and remain near zero. Vertical dotted lines mark key policy events: the FCPA executive order, a self-disclosure policy, new FCPA guidelines, and an FCPA conference. Shaded bands show 95% confidence intervals.

Markets paid attention to this change in enforcement priority.

From June to, at least, December 2025, non-U.S. firms tainted by FCPA histories lost market value, while comparable U.S. firms gained about $10 per share, on average. That's about a 16% gain.

8/

Historically, FCPA enforcement enjoyed large credibility.

That credibility is now eroding. New DOJ guidance, published in June and evidenced by new enforcement actions, prioritize cases tied to “US interests,” cartels, or security threats: vague categories that enable opportunistic enforcement

7/

That is a profound shift in FCPA enforcement.

The FCPA was designed to be nationality-blind on paper: a constraint on bribery for U.S. and (certain) non-U.S. firms, wherever it occurred.

Now, markets seem to price it in as if it was a tool of economic statecraft.

5/

A full year after the initial FCPA suspension (and subsequent return on paper), it looks like investors aren’t just betting on weaker anti-corruption enforcement overall.

They’re betting on selective enforcement, expecting U.S. firms to be largely spared and foreign firms to still be exposed.

4/

When enforcement resumed in June, many expected the bubble to burst. In short, it didn’t.

Extending our analysis, we now find that investment kept flowing, but only to U.S. firms. Foreign firms with similar corruption histories saw little or no gains.

3/

In Feb 2025, the Trump administration temporarily suspended enforcement of the Foreign Corrupt Practices Act (FCPA). In a recent @iojournal.bsky.social piece, we show markets reacted allocating ~39B to firms tied to past or ongoing bribery investigations.

📄 doi.org/10.1017/S002...

2/

How Washington Is Weaponizing Anticorruption Law The era of neutral enforcement is over.

Excited to share a new piece, co-authored with Eddy Malesky and Lucio Picci, at @foreignaffairs.com!

We return to the Trump administration's decision to suspend (and reform) the Foreign Corrupt Practices Act.

🧵: "How Washington Is Weaponizing Anticorruption Law."

1/

I like that they need to clarify “don’t touch the overhead lines”

Bias and Inclusion in Survey Data: Modelling Respondent Effort Across International and Youth-Focused Surveys - Scottish Graduate School of Social Science Across the world, surveys shape decisions made by governments, NGOs, journalists, international organisations, and private firms. They influence public policy, democratic debates, and how inequality i...

Do you have a promising undergrad or master's student interested in the quality of survey data? I am pleased to have a funded PhD studentship available to be supervised by myself, Bob Mattes and Joe Greenwood-Hau!: www.sgsss.ac.uk/studentship/...

🔥Revised paper🔥

More regressions. More tests of mechanisms. Same story. Tldr:

Brexit caused much regulatory uncertainty at a moment when UK state capacity was v weak, and hard-to-regulate companies (aka oil firms) did not think twice and generated a mess in the high seas.

Now with full receipts ⬇️

Re upping the paper thread for the occasion: bsky.app/profile/fgen...

Excited to give a talk at @tcdpoliticalsci.bsky.social! I’ll be presenting a recent paper in @psrm.bsky.social with @patrickbayer.bsky.social and @fgenovese.bsky.social: doi.org/10.1017/psrm...

Until then, I’ll mull over the fact that it really is time I get myself a proper academic picture

The Department of Political Science is looking forward to hosting Dr @lorenzocrippa.bsky.social for the Monday Seminar Series.

The current uncertainty will be profitable to fossil giants in the US, too! I’m afraid to see what stocks of American FF and renewables will look like on Monday

Whoa—my book is up for pre-order!

𝐌𝐨𝐝𝐞𝐥 𝐭𝐨 𝐌𝐞𝐚𝐧𝐢𝐧𝐠: 𝐇𝐨𝐰 𝐭𝐨 𝐈𝐧𝐭𝐞𝐫𝐩𝐫𝐞𝐭 𝐒𝐭𝐚𝐭 & 𝐌𝐋 𝐌𝐨𝐝𝐞𝐥𝐬 𝐢𝐧 #Rstats 𝐚𝐧𝐝 #PyData

The book presents an ultra-simple and powerful workflow to make sense of ± any model you fit

The web version will stay free forever and my proceeds go to charity.

tinyurl.com/4fk56fc8

Thanks, Vincent! 🙏

Thanks, Bob!

Thanks, Dan, very much appreciated!

We got excellent feedback while working on this. Our warmest thanks go to @fhollenbach.org, @nikhil-kalyanpur.bsky.social, @szakonyi.bsky.social, and @rorytruex.bsky.social for excellent early feedback 🙏 We also thank Daisuke Fukamizu and audiences at Kyoto University, UCLA, and Strathclyde 11/n

What’s next for the FCPA? In June, the DOJ revised priorities to “Safeguard Fair Opportunities for US Companies” and “Advance US National Security,” hinting the law could be further weaponized against non-US firms. We discuss likely consequences in the paper. www.justice.gov/dag/media/14... 10/n

This has important implications for corporate accountability and global governance. It suggests that anti-corruption laws like the FCPA shape not only legal risk, but also market discipline. The deregulatory approach of the current US administration may thus undercut desirable investor scrutiny. 9/n

Results show corruption’s costs largely stem from legal enforcement. Once Trump removed enforcement costs, investors viewed tainted firms as far more profitable. Suspending enforcement reshaped market incentives, effectively making (the risk of) bribery more “profitable.” 8/n

The effect was particularly strong for firms facing ongoing FCPA investigations, who stood to benefit the most from a pause of law enforcement, but we find it also for firms that were not threatened by legal actions at the time of the EO. 7/n

Our event study shows past FCPA defendants saw abnormal positive returns the days after Trump’s order. Comparable firms did not. For past FCPA targets, this translated into ~$39B in market-cap gains in a single day. After the EO, investors were betting on firms at risk of future FCPA actions. 6/n

We examined stock valuations of MNCs before and after the announcement. We compared past FCPA defendants (which have a higher risk of future FCPA actions in the long run) to similar firms never involved in FCPA cases. The first group should react more to the sudden removal of enforcement costs. 5/n

The FCPA is possibly the strongest policy against corporate bribery and a pillar of the OECD anti-corruption regime. Trump's Executive Order (EO) pausing FCPA enforcement signalled a willingness to let potential bribers off the hook. fcpa.stanford.edu/statistics-a... 4/n