Voluntary, Self-Regulatory, and Mandatory Disclosure of Oil and Gas Company Payments to Foreign Governments

What is it about?

Despite the benefits of transparency in reducing corruption,few oil and gas companies voluntarily disclose payments to foreign governments. Further, U.S. government regulation requiring this type of disclosure reduced shareholder wealth for the firms, indicating that such disclosure is privately costly. In response to pubic concern about lack of transparency, oil and gas firms and foreign governments have collaborated to disclose payment and revenue information to independent auditors who publicly report on any aggregate inconsistencies. The resulting increase in transparency is associated with a decline in corruption ratings for adopting countries.

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