What happens when corruption becomes profitable?
15 June 2026
For decades, businesses have operated under a simple assumption: corruption carries a cost. Companies that found themselves at the centre of bribing scandals risked fines, reputational damage and expensive legal consequences.
All of these factors should, in theory, deter misconduct. But deterrence relies on laws being enforced – so what happens when they aren’t?
One study from the University of Strathclyde suggests that when legal enforcement is removed, corruption can become more attractive, even profitable.
Researchers, led by Dr Lorenzo Crippa in the Department of Government & Public Policy, examined a sudden policy shift in the United States in February 2025, when President Donald Trump signed an executive order pausing enforcement of the Foreign Corrupt Practices Act (FCPA) – a cornerstone of global anti-bribery law.
The decision was justified on the grounds that the law put US multinational corporations at a disadvantage compared to global competitors.
The research, published in the journal International Organization, provided a way to test that claim – and the findings were stark.
On the day enforcement was paused, firms with a history of FCPA investigations saw their valuations rise significantly relative to other companies.
If enforcement primarily constrained competitiveness, the expectation would be that all multinational firms would benefit from its removal.
Dr Crippa says: “We tend to assume that investors avoid companies linked to corruption because those firms are inefficient or risky. But what’s been much harder to pin down is whether it’s actually the threat of enforcement – the risk of being caught and punished – that’s doing the real work.”
We tend to assume that investors avoid companies linked to corruption because those firms are inefficient or risky. But what’s been much harder to pin down is whether it’s actually the threat of enforcement – the risk of being caught and punished – that’s doing the real work.
Department of Government & Public Policy
Beyond the United States
The implications could extend beyond the United States. For decades, US enforcement has played a central role in shaping international approaches to tackling corporate bribery. Changes in that approach may influence how other jurisdictions respond, raising questions about the future direction of global anti-corruption efforts.
The finding also challenges a long-standing debate at the heart of international business and policymaking. Are companies held back from bribery because corruption itself is inefficient and risky, or because governments enforce rules against it?
The Strathclyde research suggests a clear answer: the threat of enforcement, and potential legal costs, matters most. When that threat is removed, investors appear willing to tolerate – and even reward – the prospect of corrupt behaviour.
Strengthening enforcement
The timing of the research has proved particularly significant.
In March 2026, US lawmakers introduced new legislation aimed at strengthening enforcement of the FCPA by extending the statute of limitations for corruption cases. The proposal comes amid growing concern that weaker enforcement risks undermining decades of progress in tackling corporate bribery.
As policymakers grapple with how best to respond, evidence is increasingly central to the debate. Staff in the office of Massachusetts Senator Elizabeth Warren consulted the Strathclyde research during the drafting of the proposed legislation, highlighting its relevance to ongoing discussions about the future of anti-corruption policy.
For policymakers, the findings of the Strathclyde study present a clear challenge. If markets alone cannot be relied upon to discourage corruption, then regulation – and its consistent enforcement – becomes essential.
For business, it highlights a more uncomfortable reality: incentives do not always align with ethical outcomes.
And for researchers, it offers a powerful example of how rigorous academic work can move beyond theory and contribute directly to live policy debates, helping to shape decisions with real-world consequences.
As global attention turns once again to the rules governing international business, the question posed by the research remains as relevant as ever: If corruption becomes profitable, what happens next?
